PubliGroupe Soars on Publicitas Sale to Aurelius

PubliGroupe SA rose the most on record after the Swiss advertising company agreed to sell its Publicitas media-sales unit in order to focus on its digital business.

The shares advanced as much as 33 percent to 139.90 Swiss francs and traded up 24 percent as of 12:09 p.m. in Zurich. That gives the company a market capitalization of 288.8 million francs ($327 million). More than 89,000 shares traded hands, compared with an average daily volume of about 2,900 over the past 12 months.

Aurelius AG, a German investment company that buys, restructures and resells firms, is acquiring Publicitas for a price “in the low double-digit million franc range,” Lausanne, Switzerland-based PubliGroupe said in a statement today.

The media-sales unit has always been “a millstone around PubliGroupe’s neck,” said Daniel Buerki, an analyst at Zuercher Kantonalbank who rates the company at market perform.

Digital business will generate more than 80 percent of the company’s revenues after the unit sale, which requires shareholder approval at PubliGroupe’s annual general meeting later this month.

“The sale of Publicitas is a resolute continuation of businesses in the area of digital advertising trading and processing,” Chief Executive Officer Arndt Groth said in the statement.

Today’s sale reduces the “complexity” of its organization, PubliGroupe said. The transaction will result in a one-time write-off of about 30 million francs to 40 million francs. PubliGroupe sees an operating result “in the order” of 20 million francs for 2014, excluding the results of Publicitas for 2014. The company said that operating profit will accelerate this year through “selective” acquisitions.

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