By Ian Walker
Shares of Immotion Group PLC rose as much as 79% on Thursday after the company said that it is selling its location-based entertainment business for an enterprise value of $25.2 million and that it will return up to 13.5 million pounds ($16.7 million) of the money to shareholders.
Shares at 0852 GMT were up 1.10 pence, or 50%, at 3.30 pence having peaked at 3.94 pence earlier in the session.
The U.K. immersive-entertainment company said that while it believes in the growth opportunities for the LBE business, the current macroeconomic environment makes it more challenging and further capital will be needed to accelerate growth. It said that the board is doubtful that debt finance could be secured on acceptable terms and that it doesn’t want to raise equity capital.
It said that the company will keep the home-based entertainment business which it believes has significant potential.
“Given the current economic climate we believe this is a good deal for all shareholders, allowing us to not only return cash per share in excess of today’s share price, but to go forward with renewed energy, and cash in the plc vehicle,” Chief Executive Martin Higginson said.
Immotion said that it will use the rest of the funds raised from the sale toward future opportunities for the group. The company didn’t say how it plans to return the funds to shareholders, which equates to around 3 pence a share.
The sale is conditional upon shareholder approval at a general meeting to be held on Feb. 21. If approved at the meeting the board plans to change the company’s name to Let’s Explore Group PLC.
Write to Ian Walker at ian.walker@wsj.com