(Adds analyst comments, shares)
Feb 7 Connect Group Plc, a newspaper
distributor and parcel delivery company, said it would sell its
education and care business to RM Plc for about 56.5
million pounds ($70.3 million) in cash.
Connect Group shares rose as much as 2.7 percent, while RM
stock jumped 19.3 percent.
Connect Group, which also delivers books and stationery to
schools, said RM would assume responsibility for the defined
benefit pension schemes within the business, which had a balance
sheet deficit of 7.9 million pounds as of Aug. 31, 2016.
Connect Group's full-year net debt is expected to fall to 92
million pounds from 142 million pounds, while the current
dividend policy is expected to be continued, Liberum analysts
said in a note, reiterating a "buy" rating.
The group will continue to focus on growth opportunities
within news and media, and parcel freight businesses, it said in
Connect Group stock pared its early gains to trade flat at
139.47 pence as of 0910 GMT, while RM shares were up 17.7
percent at 161.69 pence.
($1 = 0.8041 pounds)
(Reporting by Sanjeeban Sarkar in Bengaluru; Editing by
Gopakumar Warrier and Amrutha Gayathri)