Opera star Gio Compario is to join the likes of What HiFi and Total Guitar as one of Britain’s leading magazine companies, Future, buys Go Compare for £600 million in a deal that will see insurance tycoon Peter Wood pocket around £50 million cash.
Future wants to add Go Compare’s price comparison technology to its online magazines, believing consumers will want to read its independent reviews and then seek best buys online for home and motor insurance or household bills.
Chief executive Zillah Byng-Thorne told the Evening Standard Go Compare (GoCo) would fit particularly well with its brands such as Real Homes, Home & Garden and men’s lifestyle magazine T3.
“We’ll be like the shop where the assistant can offer you advice on the best product, then show you where to buy it,” she said.
Price comparators have to spend huge amounts on marketing to get themselves high up on Google search pages so people will click on them rather their competitors.
Byng-Thorne said combining Go Compare with Future’s highly-ranked editorial content would mean it could spend less on gaining that presence.
“At Future, we’ve long understood that Google wants good content and user experience so when we write content it normally ends up ranking highly in search. With GoCo we can draw that attention to GoCo’s offer options.”
She said Future’s titles around the world are read by 400 million users a month.
Future’s independent journalists would continue offering reviews on products but the “machine” of GoGo would find the review and offer deals where appropriate.
She said the “church and state” divide between editorial and advertising would remain in place.
GoCo was spun out of Direct Line founder Peter Wood’s eSure empire in 2016 with Wood retaining a stake currently at 29.6%.
As part of the deal, all shareholders will get 24% of the 136p-a-share offer price in cash, meaning he will get around £50 million in cash and end up owning about 6% of Future. That will make him a top 5 shareholder.
GoCo’s independent directors have recommended the bid and Wood has accepted the deal.
He has agreed not to sell his shares for at least six months.
GoCo investor Marlborough Special Situations Fund has also said it will accept the bid with its 3.6% of the company’s shares.
Wood said he was “delighted” at the combination which would “materially accelerate” his company’s expansion, cut the costs of winning customers and widen its market.
The Future chief executive said she had looked at price comparators across the world before deciding to open talks with GoCo.
She said due diligence had been particularly careful around UK regulators’ crackdown on insurance sold through comparators.
Watchdogs have been concerned about restrictive clauses from the comparators that prevent insurance companies offering cheaper prices elsewhere.
Byng-Thorne noted that the Competition and Markets Authority had last month said it largely approved of comparators for winning good deals for customers.
“The CMA likes comparison websites,” she said. “The regulator wants to make sure consumers do not get ripped off.”
She said she expected the review would result in more price differences between insurance companies.
Future also today delivered full year profits that beat City expectations. The company has been one of the clear winners of the Covid pandemic as customers stuck at home have spent time browsing its online magazines.
Underlying profits jumped from £54.5 million to £101.9 million on revenues up 53% at £339.6 million.
The company earlier this year bought TI Media, a home improvement magazine specialist, which fits particularly well with the GoCo business, Byng-Thorne said.