Shares of Leaf Group (LEAF) - Get Report jumped Monday after the digital media company agreed to merge with diversified education and media company Graham Holdings (GHC) - Get Report in an all-cash deal worth $323 million.
Shares of the Santo Monica, Calif company surged 21.3% to $8.52 at last check, while shares of Graham Holdings rose 4.5% to $600.21.
According to the terms of the deal, Graham Holdings will pay $8.50 a share to Leaf Group holders, which represents a 20.9% premium over Thursday's closing price of $7.03.
"Together, we look forward to continuing to build on the strong momentum Leaf Group generated over the past year, with the additional resources and expertise of Graham Holdings helping us further grow the reach of our young brands and innovate for our customers, creators and audiences," said Sean Moriarty, chief executive officer of Leaf Group in a statement.
The transaction is expected to close in either June or July of 2021 and is subject to the approval of Leaf Group shareholders and other regulatory clearances.
"At Graham Holdings, we look for businesses that can prosper under our ownership and Leaf Group's collection of marketplace and media brands make for a growing company that can do just that," said Timothy J. O’Shaughnessy, the CEO of Graham Holdings Company.
Graham Holdings operates educational services, newspaper print and online publishing, television broadcasting and cable television systems. Graham Holdings operates educational services, newspaper print and online publishing, television broadcasting and cable television systems.
Leaf said it had received Graham's buyout bid on Feb. 9, after which Leaf contacted 10 other potential buyers about their interest in Leaf. But no party submitted a competing offer.
After the transaction is complete, Moriarty and other key members of Leaf Group’s senior management team will continue in their current roles, the company said,