Around £220million was added to Ascential’s value as the owner of the Cannes Lion advertising festival breaks up the company to focus on its events arm.
The FTSE 250 group is selling its digital business to advertising giant Omnicon and its design division to private equity for a combined £1.4billion.
Ascential chairman Scott Forbes said the deals represented ‘excellent value for shareholders’ while also ‘better positioning each to achieve their growth ambitions’.
Ascential, formerly Emap, will be left with its events business.
This includes Cannes Lions, a gathering of advertising executives which attracts celebrities such as Eva Longoria and Paris Hilton. It is also behind fintech event Money 20/20.
Top draw: Ascential’s Cannes Lions advertising festival attracts the likes of Eva Longoria (pictured)
The sales mean shareholders are set for a dividend worth about £850million next year.
Shares jumped 22.9 per cent, or 49.4p, to 265p – pushing its market cap £220million higher to £1.2billion.
The company originally planned to spin off its digital commerce arm, now known as Flywheel, and list it in the US.
But then came a ‘compelling’ £741million offer from Omnicom. Meanwhile, its product design arm, WGSN, will be sold to London private equity house Apax Partners for £700million.
Analysts at Peel Hunt were surprised by the prices, with Jessica Pok saying: ‘The deals unlock the value of the group.’
Duncan Painter, chief executive of Ascential for 12 years, will join Omnicom to lead Flywheel.
Last month Ascential said revenue in the six months to the end of June was up 18 per cent year-on-year to £307.4million.