Why Perform Group Ltd Shares Soared Today

Access Industries makes a final offer for Perform Group Ltd (LON: PER) at a 27% premium.

Mark Stones

Mark Stones (TMFMumbojumbones) joined The Motley Fool in 2014 and initially worked as a writer for Fool.co.uk, before joining the Fool’s analyst programme. Mark earned a BA in English from Loughborough University. Although he spends more time reading annual reports than Russian literature these days, he still appreciates a novelist’s antipathy toward the accepted view, which is a useful attitude when trying to sniff out hidden gems on the stock market. His approach to investing has been largely influenced by the principles of Warren Buffett and Peter Lynch. He also takes a special interest in the work of healthcare companies. Outside of investing, Mark plays guitar, enjoys good writing and has a guilty passion for combat sports.

Published 1 September, 2014 10:47 am BST

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Although we don’t believe in timing the market or panicking over every stock fluctuation, understanding how a business is performing, competing and changing is vital to sensible investment.

What: Shares of Perform Group (LSE: PER) rose by 25% to 257p in early trade, after the US investment group Access Industries declared its intention to acquire all the shares in the FTSE 250 company it did not already own. The 260p per share offer — representing a premium of 18% over Perform’s Friday closing price — is final and therefore will not be increased.

So what: Perform Group is a media company that owns the digital rights to more than 200 sports leagues, tournaments and events. The company’s business activities include content distribution, on-demand video subscriptions and advertising. The bid, made by AI PG LLC, part of Access Industries Group, values Perform at around £702m.

PTV, which is also owned by Access Industries, presently owns 43% of Perform. “Access Industries has been a supporter of Perform from the start and we continue to have confidence in Perform’s management and in the company’s future potential,” said Access Industries CEO, Lincoln Benet.

Now what: Perform shareholders will be entitled to receive the full 260p per share bid price in cash. The shares lost more than half their value in December following a profit warning. Investors who bought at the bottom may decide to exit to realise significant gains.

That’s the secret, of course: to buy low and sell high. All too regularly investors follow the opposite track. The decision to ‘buy’, then, after today’s price movement, is solely down to you.