YooMedia plc
Proposed Capital Reorganisation
Proposed consolidation into New Ordinary Shares
Proposed increase in the authorised share capital
Proposed acquisition of a majority holding in Fresh Interactive Technologies SA
Proposed placing of 7.845m New Ordinary Shares at �1.0962 per New Ordinary
Share
Proposed capitalisation of Convertible Loan Notes and Directors' Fees
Proposed change of name to Mirada Plc
YooMedia Plc, ("YooMedia" or the "Company") (AIM: YOO), is pleased to announce
that it has conditionally agreed to acquire 95.2% of the issued share capital
of Fresh Interactive Technologies SA ("Fresh"), a leading Spanish interactive
television company, and has conditionally raised the sum of approximately �12.9
million (before the deduction of any expenses), following a share consolidation
and restructuring. The Company is also proposing to settle sums due to two of
its lenders, Highbridge International LLC and Platinum Value Arbitrage Fund,
LLP, and fees which are due to certain of the Directors (together, the
"Proposals"). It should be noted that the Proposals are conditional on, inter
alia, the passing by the holders of ordinary shares of 1p each in the Company
(the "Shareholders") of certain resolutions to be proposed at an extraordinary
general meeting of the Company ("EGM"). A circular and the notice to convene
the EGM ("Notice") have not yet been sent to Shareholders and this circular is
required to be approved by the Panel on Takeovers and Mergers ("the Takeover
Panel") before being despatched. A further announcement regarding the
publication of the circular containing the Notice will be made in due course.
YooMedia also proposes to sell YooMedia Dating Group Limited, its subsidiary
business which trades under the Dateline brand.
As part of the Proposals, the Company is proposing to raise a total of
approximately �12.9 million, �8.6 million of which will be through a placing of
new ordinary shares of �1 each in the Company ("the Placing") at �1.0962 per
share, mainly with Kasei 2000 SL ("Kasei 2000"), a special investment vehicle
which, as announced by the Company in July 2007, had been granted an option to
acquire the Company's games and gambling business. A further sum of
approximately �4.3 million will be raised through an investment in Fresh by
Baring Private Equity Espa�a ("Baring") which is to be completed prior to the
acquisition of 95.2% of the issued share capital of Fresh by the Company (the
"Acquisition"). These aggregate funds will be used to strengthen the Group's
balance sheet, to provide working capital, to invest in new products and
services as well as assist in financing the Group's proposed international
expansion. It is also proposed to change the name of the Company following the
completion of the transactions to Mirada plc.
As following the Placing and the Acquisition, Kasei 2000's investment in the
Company would be 43.06% of its enlarged share capital, Kasei 2000's investment
will be conditional on, inter alia, Shareholders passing, on a poll at the EGM
(which is yet to be convened), a waiver of the requirement under Rule 9 of the
Takeover Code ("Rule 9 whitewash") for Kasei 2000 to make an offer for the
entire issued share capital of YooMedia. The circular requisitioning the EGM
will itself be subject to approval by the Takeover Panel prior to its despatch
to Shareholders. However, the Board is in negotiations with an unrelated third
party with regard to a potential participation in the Placing. If such
negotiations are successfully concluded, Kasei 2000's participation in the
Placing would be reduced by such amount so that it would hold, in aggregate,
less than 30% of the enlarged share capital of YooMedia on completion of the
Proposals. Under such circumstances a Rule 9 whitewash would not be required.
The Company has found it difficult to achieve profitability in the UK market
and as a result the Group's balance sheet has become weak. An update on current
trading, including the proposed disposal of Dateline, is provided below.
Michael Sinclair will remain Chairman of the Enlarged Group and Fresh's Chief
Executive, Jos�-Luis Vazquez, will become Chief Executive Officer. Neil
MacDonald, currently Managing Director of YooMedia, will become Chief Operating
Officer and Rafael Mart�n Sanz, a director of Kasei 2000, will join the Board
as a Non-Executive Director. In addition, to better reflect the business of the
enlarged Group going forward, the Directors are seeking to change the name of
the Company to Mirada plc.
CAPITAL REORGANISATION
The transactions will involve a reorganisation of the Company's capital
structure. It is proposed that each issued and unissued ordinary share of 1p be
subdivided into one ordinary share of 0.1p and nine A deferred shares of 0.1p
each. Every 1,000 subdivided shares will then be consolidated into one new
ordinary share of �1 ("New Ordinary Share"). All share warrants and options
which have been issued by the Company will be consolidated on the same basis.
The rights attaching to the New Ordinary Shares will be identical in all
respects to those of the current ordinary shares of 1p each. The new A deferred
shares of 0.1p each will not be consolidated and will have very limited rights.
Following the consolidation there will only be approximately 912,242 New
Ordinary Shares in issue (although this number could vary due to fractional
entitlements which may arise as a result of the capital reorganisation and the
share consolidation). It is proposed that the authorised share capital of the
Company be increased to �30,000,000.
Terms of the Acquisition
The Company has conditionally agreed to acquire 95.2% of the issued share
capital of Fresh. Baring has undertaken to invest approximately �4.3 million,
by way of a subscription for new shares in Fresh prior to completion of the
Acquisition, and the Acquisition is conditional on this investment completing.
Fresh has itself convened an extraordinary general meeting of its shareholders,
which is to be held on or before 22 December 2007, to, inter alia, approve the
Baring investment. Kasei 2000 has an option to acquire approximately 30% of the
current issued share capital in Fresh, from one of the existing shareholders of
Fresh, which it intends to do immediately prior to the Acquisition, and it has
undertaken to sell such acquired shares to the Company.
The Company has conditionally agreed to pay a total of �6.45 million for the
acquisition of not less than 95.2% of the shares in Fresh following the Baring
investment. This will be satisfied by the allotment and issue of 5,883,955 New
Ordinary Shares, credited as fully paid, at a price of �1.0962 per New Ordinary
Share. Should the Company acquire 100% of the shares in Fresh, the acquisition
price would be �6.775 million and this would be satisfied by the issue of a
further 296,482 New Ordinary Shares at a price of �1.0962 per New Ordinary
Share.
Fresh is a privately-held leading provider of interactive digital television
solutions to the Spanish market. Established in 2000 by the current management
team, its principal activity is the production and development of technology
and solutions for digital television. Fresh offers a broad range of interactive
digital television solutions to some of the leading international media groups
including Digital+, Euskaltel and Jazztel in Spain, BSkyB, ITV and Music Choice
in the United Kingdom and Disney Television International, Universal Studios
Network and Warner Bros.
Fresh has 28 employees, the majority of whom are engaged in the development of
technology and the products offered. Sales and marketing activities are
conducted primarily in Spain, UK, Italy and South America.
Fresh technology is widely deployed in digital TV set top boxes in the Spanish
market and enables digital TV providers to offer interactive services to
broadcasters and viewers on their services. The Fresh portfolio is
complementary to YooMedia products and offerings, but is also designed to
operate on several digital TV platform technologies as used in territories
other than the UK.
Fresh has five principal product offerings:
* startv provides basic levels of interactive functionality such as
electronic programming guide, operator information portals, system
configuration, news and other information services.
* entertv is based on the creation of interactive tools for the enrichment of
the viewing experience through additional content and participatory
services such as voting, contests and loyalty services. entertv allows an
operator to generate their own services, personalising the content and
enabling access to the services through different devices such as mobile
telephones.
* grouptv is aimed at offering a community environment for the television
user through instant messaging, SMS/MMS, forums, email and chat services.
The community would be based around a programme, event or channel to
engender viewer loyalty, enrich the viewing experience and provide revenue
opportunities.
* challengetv provides the ability to offer interactive gaming and betting
services and integrate different media such as television, internet and
mobile telephone and thereby maximising revenue generating opportunities.
* managetv provides a powerful tool to capture information on registered
users through unique identity and thereby offer content that meets the
users' interests, likes and needs and provide a more personalised service
to that user.
For the year ended 31 December 2006, Fresh had revenues of Euro2.0 million and
profit on ordinary activities before taxation of Euro96,000. For the 9 months to
30 September 2007, Fresh had turnover of (unaudited) Euro1.4 million and profit on
ordinary activities before taxation of Euro50,000. As at 30 September 2007 Fresh
had net assets of Euro0.7 million.
THE Placing
The Company is further proposing to raise �7.6 million (net of expenses)
through the placing of 7,845,284 new ordinary shares at �1.0962 per share
("Placing Shares"). This, together with the Baring investment in Fresh, will
result in available cash, after expenses, for the enlarged Group of �11.8
million. The Directors have examined a number of suitable fund-raising
opportunities for the Company and believe that the Placing is the most suitable
opportunity available to the Company and that it is in the best interests of
Shareholders as a whole.
The Placing Shares proposed to be placed pursuant to the Placing will represent
39.82 per cent. of the enlarged share capital of the Company on completion of
the Proposals. On completion of the Proposals, at the placing price per New
Ordinary Share, the Company will have a market capitalisation of approximately
�21.6 million. The Placing Shares will rank pari passu with the New Ordinary
Shares including the right to all dividends and other distributions declared,
paid or made after the date of issue.
The Directors intend to use the net proceeds of the Placing for working capital
purposes for the enlarged Group.
Proposed settlement agreements
On 10 May 2006, the Company entered into convertible loan agreements with
Highbridge and Platinum. At the date of this document, the Company owes
Highbridge and Platinum the sums of �2.87 million and �2.34 million
respectively and it has been conditionally agreed to settle these sums in full
through the allotment and issue of 2,620,944 New Ordinary Shares and 2,133,119
New Ordinary Shares respectively at �1.0962 per share.
Proposed directors' fees capitalisation
Certain Directors have agreed to defer amounts of salary and fees due to them.
They have now agreed to waive certain amounts and accept part of outstanding
net salaries and fees through the proposed issue of New Ordinary Shares at a
price of �1.0962 per New Ordinary Share. It is proposed that this should be
done as part of the Proposals, as detailed below:
Director Outstanding Sum (�) No. of New Ordinary
Shares
Dr Michael Sinclair �250,000 228,061
Neil MacDonald �22,500 20,525
John Swingewood �50,000 45,612
Jeremy Fenn �15,000 13,684
Under AIM Rule 13 the proposed Directors' Fee Capitalisation in relation to Dr
Michael Sinclair, Chairman, is a related-party transaction. The Directors, save
for Dr Michael Sinclair consider, having consulted with Seymour Pierce Limited,
that the terms of the transaction are fair and reasonable in so far as
Shareholders are concerned.
TRADING UPDATE
The Board is also intending to sell the entire issued share capital of its
subsidiary, YooMedia Dating Group Limited, for �250,000 to be satisfied in
cash. YooMedia Dating Group Limited, which trades under the brand name
Dateline, operates an online and offline dating business, is currently loss
making and has seven employees.
Earlier this year another YooMedia dating subsidiary, trading under the brand
"Avenues", was committed to receivership. The disposal of Dateline will mark
the final stage in YooMedia's exit from the dating sector and the further
progression in management's policy of restructuring and repositioning the
Group's operations for future growth.
The interim results for the six months to 30 June 2007, announced on 28
September 2007, highlighted that the results reflected a period of
restructuring and repositioning across the YooMedia business. Significant
improvements in operating margins and reduction of losses have been achieved
during a period of rapid market changes. The Board also noted that in July it
had granted an option to Kasei to acquire the Company's subsidiary, The Gaming
Channel Ltd, for a consideration of �5.25 million. On 19 September 2007 the
Company announced that the option had been extended to allow for a continuation
in its negotiations with Kasei, which might, if concluded, result in Kasei
becoming involved in the Group as a whole. With these discussions underway, the
Directors believed that YooMedia would have access to sufficient resources to
support the growth of the business. On completion of the Proposals it has been
agreed that this option will terminate. Trading since the announcement of the
interim results has not improved to the level of revenue and gross profit
required to achieve positive earnings before tax, depreciation and amortisation
before the year end. Reduced levels of demand in the interactive broadcast
sector have continued into the second half of the year, and whilst new product
revenue streams show encouraging signs, they are not yet cash generative.
The Directors have explored a number of other financing options in order to
provide working capital to satisfy outstanding creditors and provide sufficient
working capital for YooMedia going forward. Following this, the Directors
believe that the Proposals offer the best solution to the Group's current
working capital requirements as well as providing a stronger platform for
growth of the Group following completion of the Proposals. However, the
Directors believe that if Shareholders do not support the Proposals, the
Company may not have sufficient working capital to meet its creditors'
obligations as they fall due. Furthermore, recourse to alternative sources of
finance may not be possible in the time available.
Proposed Change of Directors
The Board has agreed that Jos� Luis V�zquez, currently Chief Executive Officer
of Fresh, and Rafael Mart�n Sanz, a director of Kasei, will be appointed to the
board of the Company on completion of the Proposals. It is intended that Jos�
Luis V�zquez will become Chief Executive Officer of the enlarged Group. John
Swingewood and Jeremy Fenn will step down from the Board on completion of the
Proposals.
THE TAKEOVER CODE
Under Rule 9 of the Takeover Code, any person who acquires an interest in
shares (as defined in the Takeover Code) which, taken together with any
interest in shares already held by him or any interest in shares held or
acquired by persons acting in concert with him, carry 30 per cent. or more of
the voting rights of a company which is subject to the Takeover Code, is
normally required to make a general offer to all the remaining shareholders to
acquire their shares. Similarly, when any person, or persons acting in concert,
are already interested in shares which in aggregate carry not less than 30 per
cent. but who do not hold more than 50 per cent. of the voting rights of such a
company a general offer will normally be required if any further interest in
voting shares is acquired.
An offer under Rule 9 must be in cash and at the highest price paid for any
interest in shares by that person or any person acting in concert with it
within the 12 months prior to the announcement of the offer.
As part of the Proposals, Kasei will both subscribe for up to 7,799,672 New
Ordinary Shares in the Placing and receive 684,189 New Ordinary Shares as part
of the Acquisition following the exercise of its option to acquire shares in
Fresh as mentioned above. In aggregate, on completion of the Proposals, Kasei
would therefore have an interest in up to 43.06% of the enlarged issued
ordinary share capital of the Company.
Therefore the Proposals will be conditional, inter alia, on Shareholders
passing, on a poll at the EGM to be convened, a waiver of the requirement under
Rule 9 of the Takeover Code for Kasei to make an offer for the entire issued
share capital of YooMedia. The circular convening the EGM will itself be
subject to approval by the Takeover Panel.
The YooMedia board intends to despatch the circular to Shareholders and to
convene the EGM to seek approval of the above Proposals from its Shareholders
at the earliest opportunity.
6th December 2007
Enquiries:
YooMedia PLC +44 (0) 207 462 0870
Neil MacDonald, CEO
Nexus Financial Ltd +44 (0) 207 451 7068
Nicholas Nelson/John Mundy Nicholas.nelson@nexusgroup.co.uk
Seymour Pierce Limited +44 (0) 207 107 8000
Mark Percy
END
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