Company Profile

YooMedia plc is one of the fastest growing interactive entertainment companies in the UK.
Since 1997 we have been developing and launching leading B2C consumer brands in the gaming and community sectors. We also work in a B2B capacity with leading brand owners, agencies, content developers and broadcasters to design and develop their interactive content strategies.

Led by Executive Chairman Dr. Michael Sinclair and Group Managing Director Neil MacDonald, YooMedia has assembled a highly experienced management team that possesses a unique blend of skills and experience in the areas of Digital TV, Internet and mobile phone services and technology.

With main office locations in London, Exeter and Maidstone, YooMedia manages core assets including:

Over 30 office locations throughout the UK alone

State-of-the-art studio, production and post-production facilities at our Wapping location.

UK broadcast return path & bandwidth owner

Fully fledged UK Bookmaker License

Database with over 350K UK singles

SMS Engine access with international reach

Fully staffed 50 seat Customer Contact Centre in Maidstone, Kent

YooMedia Dating & Chat - Our dating subsidiary company manages the oldest and largest UK-owned dating brands including Dateline, Club Sirius and Avenues. YooMedia Dating has over 20 office locations throughout the UK and also manages YooChat, our world-leading interactive chat service found on UK digital cable on the Telewest platform (platform extensions planned for 2005).

YooMedia Gambling & Games - Combining the brands of Avago and Channel 425 (in partnership with William Hill) YooMedia is on the leading-edge of interactive fixed odds, casino and poker gambling services for digital TV, the web and 3G mobile phones. Our gaming business also manages YooPlay, the only interactive just for fun games channel found on all four Digital TV platforms in the United Kingdom.

YooMedia Enhanced Solutions (YES) - YES works with brand owners, agencies, content owners and broadcasters to clarify the options, define the strategies and deliver the interactive content that enhances consumer and audience experiences. YES customers include the BBC, Nestle, Celador, William Hill, Channel 4, ZipTV, The Cartoon Network and HR Owen.

31 March 2004
What will punters bet on next?
- Live Gerbil Roulette no its not an April Fool ! -

Live interactive betting on UK television moves into a new league on 1 April with the introduction of Gerbil Roulette. And you can believe it despite the date, this is not an April Fool joke! The new game is launched on iSports TV (Sky channel 431), and is the brainchild of the Television Gaming Group (formerly The Gaming Channel), which is also responsible for the BAFTA-nominated, bingo-style Avago channel.

The announcement comes in the week that sees the final demise of Attheraces, the specialist horseracing and betting satellite channel run by the BSkyB, Channel 4 and Arena Leisure consortium.

Damian Cope, managing director of the Television Gaming Group, comments: Bookmakers are increasingly seeing their profits coming from non-sports betting events we wanted to see how far punters would go and the idea of using animals not typically used in the sports betting arena seemed a good way to put this to the test! Interactive television has transformed the traditional image of smoky betting shops and men-only punters and broadened its appeal to a much wider audience our challenge now is to continually look for ways to keep this new breed of punters entertained.

Each Gerbil Roulette game consists of a 30 40 second pre-recorded film clip (selected on a randomly-generated loop) of a gerbil moving from the centre of a roulette wheel and choosing one of eight boxes in which to settle. Players place bets on the box picked. Several gerbils were used during the filming to ensure variety and that no one box was favoured.

All animals were sourced from a licensed supplier, and none were harmed in the making of the programme.

05 August 2004

PHOTOS AVAILABLE ON REQUEST

Red Button Roulette
- DITG launches first real version of casino game -

DITG's Gaming Division has taken advantage of recent changes to gambling regulations by launching the first real Roulette game for interactive television. DITGs new game is an addition to the existing offering of iTV gambling products found on its own channels Avago (Sky 181) and iSports TV (Sky 425).

Participants use the red button on their remote control to play Roulette for fun, or place bets to play for real. The presenter-led, video-based product also features a real roulette wheel rather than a computer-generated one to enhance the viewers experience.

The launch of the new game is allowed under an agreement between Sky and the Gaming Board for Great Britain stating that Roulette can now be offered via interactive television, subject to a number of player and gameplay restrictions.

Damian Cope, Managing Director of DITGs Gaming Division comments: The recent changes in gambling regulations now enable us to offer our interactive TV customers one of the worlds most popular gambling products. With the obligatory restrictions we impose on gameplay, together with our constant review of player activity, we believe that this is an exciting, but safe, new area of home entertainment.

I've concluded, it's in the interest of the founders, stakeholders, of the Television Gaming Group, to agree to terms, very favourable to existing Yoomedia shareholders.

Firstly, bear in mind, The Television Gaming Group, is only answerable to a few private stakeholders. The better the deal for Yoomedia, the higher the SP will go. The purpose of this agreement for the other party, is to have their investment recoqnised on AIM. Upon completion, the other party will wish the SP of the combined group to be as high as possible, thus increasing thier own wealth. So favourable terms for both sides, is good for the SP and everyone wins.

The SP soars and the other party achieve a 'back door' stock market lisitng, IPO.

Ultimately the higher the SP between now and completion of deal, the better off the stakeholders of Television Gaming Group will be. Favourable terms for Yoomedia shareholders, suits both sides. The present market cap is 38m. Well under a normal IPO, the other party, in reasonable market conditions, might expect to be floated at 100m, given the prospects for the sector.

75m new shares, would mean a takeout price of 17m. If the city feels the combination of Yoomedia and the new 'back door' IPO is worth 100m, then the SP would rise to over 40p. Creating value for both sides.

240m shares in issue, after completion * 40p = market cap of 96m. Given the prospects for the sector and our mobile technology, I feel this is quite realistic. Recent research suggested by 2008, 82% of U.K. households will access digital television. That's an 82% consumer penetration rate, for the new company. 96m market cap is very reasonable. The other side has an annual revenue of at least 50m.

That is how value will be created for all.

I feel the directors may be creating significant short term value for Yoomedia shareholders and I will be among the first to congratulate them, if they pull it off.

mac

More prodigious efforts. We seem to be on the right track. First, though, there is the question of share capital. MoneyAM quote 125m whereas you appear to be quoting 175m or thereabouts. Your figure appears to tie up better with the interim accounts. Since then we have had MMTV and there are options with regard to Go Play. Anyway, lets base things on your figures.

You are assuming 75m new shares at current price giving take-out price of 17m. That sounds very low; I'm not sure how you arrive at a launch price of 100m. Suppose the figure is 50m, I'm not sure how you convince the vendor that the price of YOO will go to 40p; even then that would only imply a price of 30M.

There appear to be two possibilities, possibly in conjunction with the above. First, they own 49% of a gaming subsiduary which might be worth 30M say on its own, in addition to the 30% of YOO itself. Second, loan capital is raised to pay part of the acquisition costs. These three options could be combined in some way that would be attractive to all parties. The term 'financing' would be appropriate.

Finally, I would be pretty certain that what emerges is a win/win situation. OK, the shares are suspended so we can't do anything. What appears very likely indeed is that they open much higher when the suspension is lifted.

Eric

Eric
I hope you are right. I have to say that in all the situations i have been involved in like this the share price has usually been destroyed in the short term and without any obvious reason. I have concerns.AMU recently did a reverse takeover at 10p shares auspended, dropped to 8p after. Still looking to recover on what everyone thinks was a good deal!Not expert in these matters but makes me twitchy. Yoo exciting opportunity but still getting my head around what this large acquisition will mean

Willfagg

How much of the company did the directors own? What incentives did the directors have to strike a good deal? Ours own +30%.

The target had a market cap of 37m. What was the market cap of AMU at the time? Was the dilution 100%, 200% or more? The sector Yoo are involved in, promises so much in future revenue streams, I believe the positives are greater than the negatives. I expect a part share, part cash deal, involving the raising of capital. Also, ownership may be split, lessening any dilution for Yoomedia shareholders. All sorts of ways to spank the monkey!

Imagine if the aquisition was funded entirely via a bank loan!

I wonder how long the suspension will last! - days, weeks, months? Is this a "how long is a piece of string" type question?

Considering finance sources and dilution - remember that Sony are still in here, and have a presence on the board. They will hardly watch their investment diluted and devalued: and they could be interested in putting more cash in...
everything is speculation today...

Poverty

I would have thought a week at the most. Both parties will already have links for finance. I suspect that they will have the basics established this week, be sorting out the documentation over the weekend, dotting the i's, etc. on Monday so we could know on Tuesday; perhaps allow a couple of days leeway.

As to the price, willfagg, as mac says, it is in the interests of all parties that the market re-opens at a the price they would like to see and is orderly. I would expect, hopefully, that there will be sufficient information to be able to put a price on the new YOO. We will know the additional revenue, at least 50M from mac's posts, so hopefully it will be clear what the total revenue will be in a full year. Ideally, one would like to see an earning sprojection because only if the pe is projected will the city know how to set the price. If the share capital were to jump to 300M it would need an sp of 33p to give a new cap. of 100M. If the revenue projection were to be 100M then that would be a price to sales of 1.0 I would think that is the absolute base figure. All this is very ball-park but it does show the effect of the gearing from the inclusion of a decent figure of borrowings in the purchase price.

The only thing I really do have confidence about, beacause I have confidence in the YOO directors, is that it IS GOOD NEWS!

Eric

Following the last post, I am getting increasingly positive and excited about what is going to happen to the price of YOO when it is back from suspension. I have a strong feeling in the water that we will acheive the value that this bb's faithfuls know it should have. The argument, not at all precise, goes like this:

1. The directors of YOO, including Sony Leisure, will not want their holdings diluted too much The acquired company directors will want part of the action but, no doubt, will want the odd million, a good return from their bet on their company. mac's figure of a share capital of 240M shares appears reasonable.

2. mac's figures for cap. of 96m could well be indicated for the gaming part of YOO on its own. That could well be the level of revenues next year and, based on a price to sales ratio of 1, implies a price of 40p.

3. I believe that YOO will make clear that this is but one of 7 divisions. So, won't the analysts want to put a value on YOO without gaming. Certainly not less that 15p (36m cap.) and quite possibly 20p.

So we have a potential price of 60p. Well, that must be on the optimistic side (mustn't it?). Now, lets say that the quote opens at 35p. What do you do? Certainly not sell. The answer is BUY. YOO will get a lot of new buyers coming in. If not available at the RNS, Seymour Pierce will come out with new projections giving the 60p value. Lots of clever analysts will join in. The world and his dog will want a share of action. And, there will be a shortage of stock. The new holders will be embargoed from selling their stock, for a year (?). So, do not sell; rather ACCUMULATE.

So there you have it willfagg. YOO to win the ASOS challenge on that bb. I like it! I love it!

Eric

Eric
Hope your right cos heads i win (ASOS)tails i win (YOO)and if it lands on the edge (SPS)

Thanks Eric - I will keep my paws crossed! I think YOO are trying to build a massive company in record time - they could be absolutely huge in a years time, exponential growth etc etc. It all seems very exciting - must be a gas to work there...

While the Directors were no doubt acting correctly when the stock was suspended, it was hardly jumping about. Drifting if anything. Suspension conveniently underpins the value of the chips while they work out their sums. I suspect the deal will involve a massive share issue, with loan finance to bridge the difference in valuations. Impossible to say what the final figures will be, or the market reaction. Have to wait and see.

iturama

Agree impossible to judge the figures or the price. But, given that the YOO price is that of a much smaller, passive, unexciting company, then the market reaction cannot be so laid back. I'm going for 35p on reflection and then a decent, reasonably quick ramp up but time to build up a position. Low is 30p; best is 45p. Any other predictions? Might as well have a game while we twiddle our thumbs! The other question to answer is: when will an RNS be posted? I say, Tuesday (i.e. 16th Nov.).

Eric

Some of you need to realise, the suspension may last into the New Year. I contacted Yoomedia today and was informed the suspension is expected to last, at least two or three weeks

Assuming the deal does not fall through, once the announcement is made to shareholders with full details, I expect the shares to remain suspended, right through to the EGM, for shareholder approval. This may be as late as January.

The advantage of this, is it will allow shareholders, big funds and large retail investors, to assess the terms of the 'reverse takeover' with asscoiated letter from Mr Sinclair and Mr Docherty. If it's not absoulutely clear, that the deal will be benificial to the SP, long term prospects of Yoomedia, then it won't go through.

If the suspension is lifted after the terms are released, but before the EGM, in my opinion, it will be because the board are very confident, of a positive market reaction.

I personally feel, shareholders should be given the opportunity to vote, before the suspension is lifted, which means the suspension staying, until the New Year.

An advantage of lifting the suspension once a note has been released is that the market will tell you very quickly what it thinks of the deal. I assume the majority shareholders will already be on side.
I agree with the vote principle even if it does not change matters. How many times have we seen the claim that the deal was too pressing to consult shareholders. Baloney.

The matter MUST be voted on, Yoomedia have already stated such. It requires shareholder approval.

It's not for the market to place an opinion on the deal, before us, the shareholders. I'd rather vote, before the suspension is lifted. That way, if we vote Yes and the share price falls sharply, we only have ourselves to blame.

Otherwise, if the suspension is lifted, before the EGM, the market COULD drop the market cap significantly, BEFORE shareholders have their say. Even if we then have a no vote, the market cap may take time to recover.

On the other hand, if the shares double on lifting of the supension, upon publication of the terms, but before the EGM, I won't be complaining. Pro's and con's to each option. Incidently, I expect the shares to rise sharply, just my opinion.

My prefered option is suspension until EGM, just for extra insurance. If the terms are good, fund mangers will be buying on the first click, the SP will open significantly higher. A close of 30p to 35p is possible.

iturama, iPublic

Thanks for taking the initiative with YOO. It appears that it may not be that straightforward. I am just taking as an example, Sterling Energy (SEY) who recently raised wome 100M in about a week for the Mauretania deal. Any change in shareholding deal requires shareholder ratification which may be sought at an EGM with a pre-determined notice period. Just off to see an old friend who is top class in such matters and will post his opinion. I am pressed to think of a parallel: there are many matters which require shareholder approval whcih are annouinced, affect the price, and shareholder approval is taken for granted. No doubt YOO will take legal advice and that could well depend on whether the issue is contentious; I somehow doubt it will be, i.e. a win/win/win situation.

Eric

EWRobson

Are you sure SEY only took a week? I'm sure the funding rounds progressed for several weeks at least!

As regards funding the deal, I still prefer straight dilution, even if it means a further 300m shares, at the moment we have around 165m. I'm not keen on debt, as it has to be repaid with the interest, which will slice down 2005 profit. Also, even with 200% dliution, it makes the EPS calculation a simple one, for the likes of me.

Revenue of 50m, so let's assume they are projected to make a FY post tax profit of 3m. Again pure guesswork. In this example, it may be reasonable to pay 12* profit, so the business will cost us 36m . They may want 15* profit or more. The FY profit may be 5m on 50M revenue. Then we may pay 12* 5m, so 60m for the business. Until we know the FY profit of the business, a fair price could be anywhere between 20m and 80m. I'm assuming the businesss is a profitable one, on that kind of revenue.

Example: We pay 60m. Meaning additional shares of 260m. 260m shares * 0.23p = 60m. The FY profits are projected to be 4m. So we pay a PE of 15. Here is why the deal will create short term upside for Yoomedia shareholders.

Our own broker forecast 2005 profits of 1.7m, so this can be added to the 2005 pot. Assume a growth in the other sides profits (now ours) in 2005) say 5.5m. Add the two together and round down to 2005 FY profit of 7m.

450m shares in issue. I've added 25m for options etc:

7m 2005 profit/450 shares = 2005 FY EPS of 1.55p.

Place a PE of 30 on the new business and the new SP is 46.5p

Place a PE of 40 on the new business and the new SP is 62p.

A lowly PE of 15, which would not happen as the sector is very high growth for the next 5 years, would see the SP at 23P, equal to todays price.

If the other side is profitable and Yoomedia can barter less than 15* annual profits, then the resulting rise in the SP will benefit existing Yoomedia shareholders and the new holders. Infact, it may be advantageous to all concerned, for the other party, to accept say 10* profits for the business. They will benefit from the resulting hike in the SP of the newly enlarged company.

I do not know what mght be considered a good yardstick, regarding the number of years profit, one pays for a business, which is unquoted. It must depend on many variables.