TLDR
- Gen Digital made a preliminary takeover approach for GoDaddy, according to the Financial Times.
- GoDaddy stock jumped as much as 11% Thursday and was briefly halted for volatility.
- Gen Digital stock fell about 8% on the news.
- Talks are at an early stage and there’s no guarantee of a deal.
- Both companies declined to comment on the report.
GoDaddy stock climbed as much as 11% on Thursday after the Financial Times reported that Gen Digital made a preliminary approach to buy the web hosting company. The move was strong enough to trigger a brief trading halt for volatility.
Gen Digital stock moved the opposite direction, falling about 8% on the day.
The report said Gen Digital made its first offer in recent weeks. Talks are described as early stage, and there’s no guarantee they lead anywhere.
Gen Digital is the company behind Norton 360, LifeLock, CCleaner, and ReputationDefender. It was formed in 2022 when NortonLifeLock merged with Avast.
Neither company has confirmed the report. A GoDaddy representative told Barron’s the company doesn’t comment on mergers and acquisitions. Gen Digital declined to comment.
Why GoDaddy Could Be a Fit
GoDaddy runs roughly 81 million web domains. That’s close to a fifth of all registered domains worldwide.
The company also serves more than 20 million small businesses, creators, and entrepreneurs. For a security company like Gen Digital, that customer base opens the door to bundling antivirus and identity protection tools with web hosting and domain services.
Gen Digital currently carries a market value of around $15.7 billion. GoDaddy is valued at roughly $12.2 billion, so a deal of this size would be one of the bigger moves in Gen Digital’s history.
The FT report didn’t include specific financial terms. No price or structure for a potential offer has been made public.
A Rough Year for GoDaddy
The takeover interest lands during a difficult stretch for GoDaddy stock, which was down about 15% for the year before Thursday’s jump. Some of that pressure has come from worries that AI website-building tools could eat into GoDaddy’s own AI product, called Airo.
Airo lets customers build websites and branding materials with help from a virtual assistant. Investors have questioned whether newer AI tools from competitors could pull business away from it.
Not everyone shares that concern. Oppenheimer analyst Ken Wong said last month he was confident in Airo, pointing to higher customer spending and effective cross-selling tied to the product. He rates the stock Perform.
Wong also noted that GoDaddy’s management has kept costs tight while returning cash to shareholders through buybacks.
Rival domain and web-building company Wix.com also moved higher on the news, gaining more than 2%. Investors appear to be pricing in the idea that consolidation in the space could extend beyond GoDaddy.
For now, the market is left waiting. Nothing about the approach has been finalized, and both companies are staying quiet in public. The next signal will likely come if talks progress far enough for either side to confirm or deny a deal.
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