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.

absolutely right Dynamite. I felt the same initially as i Public but when you step back i come up with the same view as yourself. I sold and went back in again ....when i had calmed down. I hope he will not mind me for saying so but I believe Eric did the same

Dear Shareholder.

I now have the holding and contact details of shareholders, representing, 4.65m shares. This is a significant figure and if enough of you decide to vote NO, we may still be able to block this merger. Many sharholders are unhappy with the severely discounted placement and 16m of new share options at 15p and there is no reason why we must accept the destruction of our shareholder value.

In respect of my holding of Yoomedia shares, of 405k, I will be voting NO the merger. I urge you to consider doing the same.


Although I approve of the merger of DITG, TGG and Yoomedia in principle, the problem is the massively discounted placement at 15p. The effect of this undermines any short or medium term benefit of the aquisition, for existing Yoomedia shareholders.

EVO's latest research for Yoomedia, forecasts a pre- goodwill, PBT of 2.6m, in FY05 and as a consequence, at 24p, were only trading on 14*, next years post tax earnings.

At 24p, the shares were excellent value, on a forward looking, 12 months basis. I believe the high growth sector Yoomedia operates in, justifies a PE of 25, therefore a 12 month SP target of 40p was extremely realsitic, providing EVO's assumptions for FY 2005 were accurate. Be in no doubt, before the details of this proposed merger entered the public domain, Yoomedia were an extremely attractive investment.

I beleive I represent the views of the majority of retail shareholders, who have e.mailed me their concerns since the details of the merger were announced. The 15p placement is so dilutionary for existing shareholders, all benefit derived from the merger is cancelled out. Infact we feel substantially worse off.

If the enlarged group, does indeed turn cash flow positive next March and IF the enlarged group achieve a profit before tax of 4m for 2005 (no tax payable), the EPS for FY 2005 would still be around half the FY 2005 EPS for the old Yoomedia, without DIGT & TGG.

So either the directors are expecting a FY2005 PBT of 8m, which should deliver an SP in 12 to 16 months, equaling the performance of the existing Yoomedia, OR they acknowledge the consequences of this deal, will destroy shareholder value for a minimum of 18 months.

So are they really expecting FY 2005 PBT of 8m?? If FY 2005 PBT, is not at least 6m, they are eroding the value of the existing shares. If not, the whole exercise is very damaging to existing shareholders. We will be forced to wait at least 18 months, maybe more for an SP of 40p, which would have been delivered by the existing company, providing the targets in EVO's research note were met.

Why are they doing this? Please contact Yoomedia (details on website) demanding they reconsider. It's not to late to change their minds. The idea of the merger was beautiful and the target group blends perfectly with Yoomedia. However, the 15p placement turns a good deal for shareholders into a very bad one indeed.

How can they justify the 16m of new share options at 15p, when the actions of the directors has eroded 25% of the value of Yoomedia since suspension and is ensuring through the merger, investors must realistically wait two years for a share price of 40p, instead of one.

The old Yoomedia represents our only chance of an SP of 40p in 12 months.

If the proposed merger is approved, I will still hold, but I expect to wait MUCH longer, for the SP to reach 40p.

iPublic

Very good note (worth putting the spell-checker on it if transferred from, say, Word). Suggest you copy Shares (although I believe they are following this board), IC, FT and Times. Will never change the EGM but what might be achieved from a good media campaign?

Eric

EWRobson

Are yoo questing my abellity tooo spel?????

The cheek!!!!!

Eric: I thought the Shares response to your note was trying to smooth over this deplorable action by the company and its advisors. I agree with iPublic it will be some time before the company is able to realise the benefit of this acquisition (if it goes through) in terms of shareholder value. As for the Institutions, fine they get the good deal with a discounted offer at the expense of the small shareholders. Worth looking at the respective performance of the Fund Managers who bought into this offer though! Tells it owns story, and as I stated earlier I have sold my holding and have no regrets about it. Had I held it though I would have pledged the holding to iPublic, to ensure at least the protest vote is registered. jgt

The 16m share options.

Presumably, there will be an announcement after the EGM, concerning how these options will be allocated?

Will the directors maintain their own percentage holdings? I expect they will and what a smash and grab raid it will be! Legalised robbery, nothing more, nothing less.

Still never mind folks! The good old British stiff upper lip, is the order of the day. Pretend it's not happening. Pretend it does not matter. Vote yes, because they are nice men and Mrs Smith from Surrey likes the photographs of the handsome directors on the Yoomedia website.

The following are laughing thier socks off:

1. EVO

2. The 15p investors.

3. The directors, though the 16m of new share options at 15p.

Still, if you all want to go ahead and vote yes, than that's your perogative.

In the long term, this is an excellent long term investment. Possible 100% upside in 12 months, IF a takeover approach is made. The 29m of tax losses from the enlarged group, means once profitable, investors can look forward to tax free profits for years, boosting EPS.

THE 16M OF NEW SHARE OPTIONS IS MORALLY WRONG.

There is absoulutely no justification for this. The directors COULD and SHOULD have set the option price at 20p. If they had done so, then I would not be spending my time typing this message.

iPublic: Purely hypothetically, it may have gone like this...EVO to YOO, no chance of getting these funds raised at the current SP, but we have taken soundings and can report a favourable response to a slightly lower SP of 15p, now I realise this is below the current market price but it will be quicker and cost you less. Now I realise that doing this will dilute your Executive Options but that can be corrected in the short term by issuing more via the renumeration committee as they think fit!! To which YOO agree.

As you say the approach is morally wrong and I will be interested to watch this story unfold over the nest few months/years!

I take it you're a bit pissed off then.

MS

Oh that's nice, Bernard Fairman, a non-executive director of Yoomedia, gets 15k salary a year, according to the prospectus. All for doing YOO a big favour, by providing voting support at EGM's.

http://www.matrixgroup.co.uk/images/389.pdf

Clink on the link and it takes you to the interims of
Foresight Technology's interims. Foresight are of
course one of Yoomedia's largest and long standing,
institutional investors, who support is crucial at
EGM's.

Scroll down to page 4, where Yoomedia are listed, then
scan your eyes across and you will see that Bernard
Fairmam, is also the Investor Director, in charge of
the Foresight holding in Yoomedia, as well as being on
the board of Yoomedia, as a non-executive director.

So it seems he does fu*k all work for YOO and his only
purpose is to provide the Yoomedia board with a
massive chuck of the required vote at any EGM. Bloo*y
cheek!

Yoomedia have obviously been extremely clever in
engineering matters in this way. It not an accident
for sure. Then remember Sony also have a non
executive director on the Yoomedia board and one can
see why.

I beleive Leo Noe, a Yoomedia board member, has connections with Swiftventure, a large holder with 5.1%

FTV = 11.3%

SONY = 8.4%

Swift = 5.1%

That's a whopping 24.8% of the required vote, added to the directors own large percentage holding and Yoomedia already have well over 50% of the 75% needed. They know this, everytime an aquisition is made or they award themselves, share options at crazy prices.

Blantant manipulation of the voting system.

PHONE, WRITE OR E.MAIL YOOMEDIA AND ASK WHAT EXACTLY DOES BERNARD FAIRMAN DO FOR HIS 15K? IF HE ACTUALLY CONRIBUTED ANYTHING SIGNIFICANT, IT'S REASONABLE TO ASSUME HE WOULD VALUE HIS SERVICES AT MORE THAN 15K. YES???

This financial year, 15k of YOUR money is being wasted, employing a non-executive director, simply to secure the votes at EGM.

IS THIS LEGAL???

AN FSA INVESTIGATION IS CALLED FOR HERE!!!

iPublic: Re Mr Fairman, there is nothing that stops him doing as you say. So in that sense it is legal. Essentially I would suggest he is there to protect the investment by his masters...Foresight Technology. Ditto Sony. jgt

So it's a blatant waste of shareholders money?

It also provides the directors with a greater chance of voting themselves options at silly prices.

I agree. On this evidence hardly the best example of Corporate Governance to be seen at YOO. Hence my concerns about the Shares magazines response to Eric's note. As it stands the action of this company board and it's advisors, from what I have read in the Public domain, is contemptible. They are acting as though they are still a private company...and they are the only shareholders to worry about. jgt

You know my thoughts echo those made above.
On the other hand, if you assume that the directors really are acting in the best interests of the company and its shareholders, perhaps matters were a lot worse than we assumed and 15p is a fair price. Has to be one or the other!

From A Competitors Website.

PaulKent - 3 Dec'04 - 16:56 - 4294 of 4295

I think Im instinctively siding with Trig here.

The Directors of any company (forget that they own shares too for the moment) have a duty to do their job (for which they are paid INCOME) for the benefit of the SHAREHOLDERS.

IF they think this deal is in the best interests of SHAREHOLDERS then great...lets do it. But why do they THEN need to go and give themselves 16 million options?..at a price way below the price when they were considering this.
During the period leading up to this deal, the Board were working for a salary and already had options; a package which obviously was sufficiently motivational and appropriate or they wouldnt have been working as hard and wouldnt have been incentivised to come up with such a great deal. Why therefore, is there a sudden need to "motivate" them even more, AFTER theyve already done such great work finding and putting otgether this deal??..who decides these things?..i simply CANNOT believe that the deal couldnt have gone through WITHOUT the options, and it just feels like the people who CAN are lining their own pockets effectively at the expense of existing shareholders who they are meant to be there for the benefit of!!!..

After all, 16 million options at 15p will make a profit of 1.6million immediatley when the price goes back to 25p shortly...and if they DONT think it will go back to 25p soon, then why are they recommending this to the shareholders who were all looking at shares valued at 25p before the deal?!?! If theres no value for existing shareholders in doing this, then why do it...?..and if existing shareholders WILL get good value, then by the same token they have voted themselves a fortune retrospectively (in that the work they did to secure this deal was in the past and they were remunerated for that)

and dont even let me get started on how EVO managed to nick shares at 15p..AND still get paid millions in fees..still cant believe that was the BEST tender that could have been achieved from any broker..
but hey, wouldnt it be great if EVO start selling the shares they havent got yet, and then we vote against it..hmm..now what would that remind me of.???!!!!!!!!!!

PaulKent - 3 Dec'04 - 17:06 - 4296 of 4297

actually what i DONT like even more, is that because most people probably want the deal to go through, theres no way of voting FOR the deal, but AGAINST the share options!...its ALL or nothing, as the bit below makes clear..if they had any conviciton of the fairness and rightness of it, theyd separate the vote, get the deal approved and then argue their case for the options and they ought to believe in their ability to convince us its fair and necessary



At this meeting the following Resolution
will be proposed to:

(a) increase the authorised share capital of the Company;
(b) approve the Acquisitions for the purposes of Rule 13 of the AIM Rules;
(c) grant authority to allot the New Ordinary Shares, the Deferred Consideration
Shares, 3,295,797 new Ordinary Shares pursuant to the Hughes and Hancock Options
and an additional 149,993,100 Ordinary Shares;
(d) appoint John Swingewood and Jeremy Fenn to the Board of the Company;
(e) approve and adopt the New Unapproved Share Option Scheme;
(f) disapply statutory pre-emption rights; and
(g) adopt the New Articles.

The Resolution gives authority to the Directors to allot shares otherwise than
pro rata to Shareholders but this authority is limited to (i) the allotment of
the Placing Shares for the purpose of the Placing, (ii) the allotment of
Ordinary Shares by way of a rights or other pro rata issue in the future (iii)
the allotment of 3,295,797 Ordinary Shares pursuant to the Hughes and Hancock
Options and (iv) the allotment of up to 44,500,000 Ordinary Shares for cash (for
any purpose).

To be passed, the Resolution, which is a special resolution and is conditional
on Admission, requires a majority of not less than 75 per cent. of the
Shareholders voting on a poll in person, or by proxy, in favour of the
resolution at the Extraordinary General Meeting. If the Resolution is not passed
none of the Proposals can be implemented.

Yes and they know it! It been deliberately set up this way.

What's stopping the directors awarding even MORE share options in the summer. Why stop now? They could carry on and leave us with NOTHING!

Seriously, is there a point, where the 'big justice man' steps in and saves the day??? They are behaving like they own the company. They don't.

Is there a lawyer around?

LISTEN EVERYONE.

THE OPTIONS REPRESENT MORE THAN DOUBLE THE NUMBER OF SHARES ISSUED TO BUY MMTV IN SEPTEMBER.

YOU ARE BEING ROBBED. DO YOU UNDERSTAND?

iPublic

I get the impression that you are even more angry than I was before my TBOOP (apologies for my spellchecker mode, by the way - can't control that particular sub-personality). I have taken the above comments, particularly by yourself, johngtudor and quoted from Kent, onboard. I will write a follow-up letter to Shares and quote it here. I might do it the other way round which worked with PET. My first reaction was that Timon Day had done his research well, and I think he did, but the share options issue is a bit of a stinker in the tail. Evolution are too clever by 99%, not just half! Mind, better to have them on your side...! My main point is still - it didn't have to be done this way!

Eric

Of course I want to win. If I had access to quality legal advice, I would take it.

A HIGH COURT INJUNCTION IS NEEDED, TO STOP THE EGM ON THE 20TH DEC.

We are not been given the choice of voting for the merger and rejecting the options.

Is this normal? Can anyone provide additional examples of other company's behaving in this way.

Just because it's always been done this way, does NOT mean it can't be challenged in court. Test cases are heard in the High Court all the time. New precedent's are set every year, which lawyers then refer back to at later dates.

The denial of the opportunity to vote for the merger, but reject the options, is undemocratic and against my rights as a shareholder.

It could also be a breach of my human rights.

If someone took Yoomedia to the High Court over these options and the 'all or nothing' approach, then it could be very interesting. A new legal precedent could be set!