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.

iPublic.
Ref your post 215. Could you explain how YOO could maintain control in the event that it paid more than 100% of its current outstanding shares?

It's not a merger. New Yoomedia shares are created and issued to the stakeholders/management of the other side.

You mention control, well it's no different to the present situation where the directors own just over 30%, meaning there is nearly 70% of shares with other investors, yet the board remain in control, yes?

Ultimately, shareholders have the power to sack the board. Let's assume the new shareholders have much clout, due to the 100% dilution. In theory, it would not be hard for them to gain the support of a few other insitutions and oust the present directors, bringing in their own team. But why would they do this? Why would other institutions agree to lend their support? The existing board would have to have done something wrong and I can't see it at the moment. I guess you are refering to boardroom, power struggles.

Finally, even if the new shareholders did stage a boardroom coup, say next year to bring in there own team, this would not be a disaster, as being huge shareholders, they still have the best interests of the SP at heart and can obviously run their own company in an exceptional manner, knowing the industry inside out. Why on earth, would anyone remove Mr Sinclair, Mr Docherty ect: The new shareholders would be 'shooting themselves in the foot, would cause a massive amount of bad publicity and affect the SP.

No doubt much of the key management and employees of the other side, will be retained and the enlarged comapany streamlined and restructured.

No one has yet mentioned the importance of 'lock in' and a two year, orderly market disposal agreement, as in the 'Go Play, Sony' deal, last December.

I do not feel the vendors would accept an all share offer, as it's only natural to want the abilty to enjoy the fruits of your hard work. So my best specualtive guess is a 25% cash, 75% share offer.

Clearly, it's important not to overpay and the cheaper the better. However, consider the effects of a 'lock in'

The one thing markets fear is a sudden flood of shares, swamping the MM's meaning the SP drips constantly. Such an overhang or the fear of an overhang, can depress the SP for months. Also, it dramaticaly increases the liqiudity of the stock, so any rises are much slower. However, if the vendors are happy to 'lock in' the new shares, as they are able to enjoy the 25% lump sum, then this means the liquidity is unaffected. As the new dilution, will not find it's way onto the market, the SP can still spike up quickly on little volume and the fear of an overhang is gone.

A 'lock up' of one year, followed by a two year, orderly market disposal agreement, also sends out a message of tremendous confidence by the vendors. The vendors will be signaling their belief in the growth prospects of the sector, the company and it's products, technology. It's also a tremendous vote of confidence in the existing Yoomedia board. No doubt the existing directors of the other side, will be retained, most of whom will be shareholders, along with key employees, effectively backing their own ability's.

A one year 'lock in' followed by a two year, orderly market disposal agreement, also provides the vendors who are also directors, non executive directors, managers in the new Yoomedia, massive incentive to work hard and stay 100% focused on the task in hand. Those following Yoomedia will note that all aquisitions to date, had the appropriate 'lock in'.

In summary a 'lock in' period is essential, preferably with an orderly market disposal agreement afterwards. Providing this is achieved and we do not overpay, I fail to see how the SP cannot soar upon the lifting of the suspension.

http://www.ditg.tv/TGGRacingWorld.pdf

http://www.ditg.tv/TGGGamingPortal.pdf

http://www.ditg.tv/TGGRoulette3Dice.pdf

http://www.ditg.tv/13_Multistream.pdf

http://www.ditg.tv/7_XShop.pdf

http://www.ditg.tv/12_Dating.pdf

20 May 2004

WILLIAM HILL LAUNCHES TELEVISION CHANNEL WITH DITG

William Hill PLC has signed an agreement with the Digital Interactive Television Group Limited (DITG) that will see it broadcast a branded television channel on the Sky digital platform. The channel is scheduled to launch in late 2004.

Using DITGs unique broadcast and technology services William Hill customers will be able to place bets and play games directly via their television sets, initially on Fixed Odds Betting Terminals (FOBT)-style betting formats. The new service will also show live sports events and provide editorial sports content.

This initiative gives William Hill access to the growing Sky Digital platform that currently reaches more than seven million homes in the UK. There is also potential for the channel to be made available in licensed betting offices.

Says Damian Cope, Managing Director of DITGs gaming division:
DITG has already shown it can service traditional broadcasters this partnership shows us doing the same in the gambling arena with the UKs biggest bookmaker.

David Harding, Chief Executive of William Hill, said: This initiative places William Hill at the forefront of the UK betting industry in exploiting interactive television, which is gaining growing acceptance as a transactional platform. Our well known and trusted brand, ability to cross-promote the service to customers in other parts of our business, and choice of partner in DITG, a proven operator in this field, should provide us with significant advantages in pursuing this new profit stream.

iPublic, mactavish

I think a reasonable conclusion, given the use of the word 'financing', is that payment for the acquisitions will be by a mix of shares and loan stock and/or cash. The latter will involve financing charges. It also seems a reasonable assumption that the acquiring company(ies) will not achieve a controlling interest. In trying to discern what the movement in share price might be, I thought it would be helpful to do a fairly simple, possibly simplistic, exercise, as per the following table.

note________ Shares(M) price,p cap.__ cap. t/o pbt_ pe
______________________________ shares loan m_ m
1___ Yoomedia 166.5___ 23_____ 38.3_______ 30_ 1.7
2___ Acquisns 133.5___ 23_____ 30.7_______ 50_ 5___ 10
3___ loans___________________________ 19.3____ -1.5

4_________tot 300.0___ 23_____ 69.0__ 19.3 80.0 5.2 13.4
5___change pe_________ 25.8___ 77.3________________ 15
6___change pe_________ 51.6___ 154.7_______________ 30
7___cap 100m_________ 33.3___ 100.0_______________ 19.4

The steps are:
1. Yoomedia at current price and advisors projected pbt.
2. Acquisitions at assumed turnover of 50M and PE of 10.
3. The loan element to keep issued shares at 300M.
4. Projected pe taking into account increased share capital and loan charges, taken at 8%.
5. Changing pe to 15 gives current price of 25.8p.
6. Changing pe to 30, not unrealistic, gives price of 51.6p.
7. Working from a market cap. of 100m gives pe of 19.4 and price of 33.3p; more cautious, but cap. is not too demanding.

This exercise is informative. It is in the interest of all parties to have a decent price and decent cap. We've started off by saying a purchase price of 50M but the end price of 33.3p implies a purchase price of 63.8M. We might have worked the exercise from the capital value for the new entity of 100M and then seen the effect of varying loan and share content. The figures used appear to give a nice wadge of cash for bought-out shareholders but also a decent stake in the new company, for which we might assume they will be working directors.

The value of the exercise, I believe, is that it will help us to judge the actual terms, the likely capitalisation and share price movements. There could be an excellent short-term buying opportunity if the opening sp is too low (or selling if too high!).

Would appreciate your views. Of course, the whole thing might fall through (from due diligence?).

Eric

Thanks Eric. An excellent working example, demonstrating how short term value could be created from this major aquisition.

Personally, I'm very cofortable with a 2005 PE of 30. Not in the least bit excessive, bearing in mind the tremendous growth prospects for the sector, over the next five years.

The reaction of the market, after lifting of the suspension, will be fascinating. Although your figures are based on 2005 revneue and profit, we are nearly in 2005 now. Blink and it's the New Year. Then remember, stock markets tend to look, 12 months into the future when placing a PE on high growth shares in exciting sectors. Using the figures in your example, it's not beyond the realms of possibilty, that the SP might rally to 50p by Christmas. We can see from your example, how one might arrive at 50p, in the short term.

An interesting situation developing. Under normal circumstances, investors would be taken by surprise with an RNS, then must research the company before buying. However, due to the suspension, every man and his dog, will be watching for the announcement and Chairmans's letter to shareholders. Many investors will already have conducted their research and have committed themselves to buying, providing the terms of the deal are right. I sense many fingers hovering over the buy, sell button ready for trading. The first hour will be explosive, one way or another.

It's difficult to see how SP value can actually be erroded from this deal. I'm confident the key players and advisers will be studying many options, before decidng on the package which delvers the best short and long term value to all stakeholders.

How about convertable loan stock. Exactly like in May 2003, when the directors and institution raised 2m. The terms were the loan would be converted into shares, once the SP traded above 30p for 30 days. The amount of dilution, depended on the length off time which passed, until the target and dates were reached. As luck would have it, the loan notes were converted at the end of least year, at only 20% dilution, thanks to the outstanding performance of the SP. However, if the SP had not met it's targets fo 5 years, the dilution would have been nearly 100%.

So how about the VC coughs up say 20m, in return for convertabale loan notes, with a target price of 40p or above for 30 days. In 2003, the loans notes paid interest, from memory, a couple of percentage points above base rate.

One advantage of the above, is it provides the directors, who are major shareholders, a huge incentive to work hard and drive the SP over the target price, so the loan notes are converted into shares, as quickly as possible. The sooner the target price is reached, the less the dilution and the less interest one pays on the loan. As soon as the loan stock is converted, the interest payments stop.

iPublic

That makes a lot of sense. Something like that was in the back of my mind but I hadn't recalled that YOO had already gone that route. The conversion gives a profitable pay out for the VC: he presumably doesn't need to convert if the conditions are met. He will probably want to realise the investments but this may depend on the type of VC and his reading of the prospects. Given that a really good deal comes out of all this (if it had been going to fall through it would probably have done so by now) it is worth recalling that YOO was trading at over 50p early this year - we have come a long way since then and the value is now tangible!

Eric

Yes, if 2m was raised last time, when company had no revenue and no one believed or cared, imagine how much can be raised now, via convertable loan stock. As much as they need probably.

VC's will love it, they get interest at say, 2% above base rate to provide income, while the capitel value of their investment grows. So it's like a short term bank loan, until SP reaches the required price for say, 30 days.

Now then chaps, will the directors be back for more Yoo shares? Will Sony and Foresight? The directors participated in the convertable loan stock issue in 2003, so why not again?

On the other hand, a VC may well step in and provide all the required capital, under a convertable loan stock agreement. Interest can easily be paid out of next years profits.

iPublic

There's some great thinking on this bb; pretty well-informed too. Might even be worth drawing YOO's attention to it - don't want them to underplay their hand. Stupid me! They have not only played their hand well, they have dealt themselves a set of red threes and jokers and are now going round asking others to join the party! Only problem is - here is me taking out CFDs in ASC and AZM and I am not able to do the same with YOO. Highly frustrating and my holding is far too small! Hope yours is more respectable!

Eric

Freeview 'to end 2004 with 5m homes'
Freeview looks set to burst through the 5m home mark by the end of the year, putting the free-to-air digital service on track to catch digital leader Sky within 12 months.

According to a MediaGuardian report, 50,000 set-top boxes are rushing off the shelves each week, with 2004 sales expected to top 3m.

David Chance, who runs paid-for Freeview add-on service Top Up TV, predicted Freeview would be in 8m homes by the end of next year.

"By December 2005, the Freeview platform could be as big as Sky, which is a very big milestone," Chance is reported to have told an industry lunch.

Chance - a director at ITV plc and a former BSkyB deputy CEO - claimed his own service was comfortably on target for 250,000 subscribers within two years of launch.

In May, Chance announced Top Up TV - which offers a package of channels including E4 and UK Gold for 7.99 per month - had gained 20,000 subscribers in its first month after launching at the end of March.

Lovelacemedia | 17.11.2004
Search news:

YooMedia in talks to create iTV giant

http://www.dtg.org.uk/news/news.php?class=countries&subclass=193&id=449


Shares in interactive television specialist YooMedia were suspended yesterday after the AIM-listed company said its discussions to acquire the Digital Interactive Television Group (DITG) had leaked.

In a statement to the City, YooMedia - headed by former Telewest and BBC interactive chief David Docherty - said the acquisition of DITG depended on its ability to raise sufficient funds as well as the approval of its shareholders.

A combined YooMedia/DITG would create an interactive powerhouse capable of rivalling BSkyB with a broad range of commercial services.

The acquisitive YooMedia last December bought Sony's interactive games channel GoPlay TV for 6.4m. Sony took a 10% stake in YooMedia under the deal.

YooMedia later purchased gaming channel Fancy a Flutter and the Dateline dating business. In July this year, YooMedia acquired mobile phone marketing company Whoosh. Founded by David Bainbridge, former deputy marketing director at Five, Whoosh uses SMS text messages in brand marketing campaigns, and in television quiz shows such as ITV's Who Wants to be a Millionaire?

DITG developed the hugely successful gaming channel Avago on digital satellite. It provides 'red button' interactive services to the BBC and Channel 4 as well as to Zip TV, an interactive advertising consortium.

http://www.yoomedia.com/financial_information.html

Yoomedia PLC has requested that trading in its ordinary shares be temporarily suspended on the AIM. This suspension is not expected to last more than 2 weeks. For more information, please contact John Murray at Powerscourt on 020 7236 5615.

iPublic

Probably best that you or mactavish call John Murray. Should mean an answer by Monday. Intriguing!

Eric

Two weeks is Wednesday. Expect trading to resume by end of November. Lot's of investors in the city, will be waiting for this news.

John Murray, is highly unlikely to offer any inforrmation, which is not in the public domain.

Come on Yoo!! Have a bet with the missus as to my portfolio total by Christmas and a good opening for this, coupled with good runs on IDS/GLD/SEO could tip it in my favour. But seriously, I'm in this for a while, looks very exciting prospects for the future. Thanks guys for good news flow, I know more about this company through this than I could ever find out myself elsewhere.
Happy Christmas to us all!!!

From a competitor's BB. Full credit to JonnyCash for research. Thanks JonnyCash.


Extremely interesting article in today's Sunday Times, Business section - "Dating agency seeks growth"

The article profiles 'Dateline', and Jim Weir's (MD) task briefly as follows:

Dateline is synonymous with dating industry - it has been around for 40 years! but it has been in decline - it needs to compete with the new internet dating agencies. Weir will nurture and promote Dateline's historic brand values of trustworthiness and sincerity.

Weir is now in charge of integrating the recent dating acquisitions - Dateline, Club Sirius and Giles, with YooMedia's interactive television, internet and mobile communications operations.
His key task is to launch a Dateline mobile-phone service that texts alerts to members when potential partners are found.

The diverse group of Yoo's dating companies will consolidated and relocated to a new head office in Maidstone.

Dateline has 25,000 members - the task is to double that number utilising all of Yoo's communications platforms. There are 2 million British adults who admit to using a dating service. The dating industry is worth #600 million!!

Dateline's new mobile service is designed to attract young members. It will be the first in Britain!! No joining fee but Dateline will text members every day with details of a potential partner whose message they can hear!!

Dateline's website has recently been upgraded - members pay #15 per month to receive a list of selected partners.

The company is building an interactive television service that has 8000 users. Members can browse profiles at a cost of 9p per minute.

Finally, in January, the company will begin looking at opportunities to take the brand into North Europe and America where the technology and concept are well established.

-----------------------------------------------------

This is great news and is a further example of how Docherty and his team are strategicaly developing and moving the business forward.

This is both evolution and revolution !!

This was a full page article - great publicity for both Dateline and YooMedia !!

Very soon now the City will wake up to the full potential of this little gem and the share price will respond accordingly.

Hold on to your hats!!

http://www.timesonline.co.uk/printFriendly/0,,1-528-1367542,00.html
http://www.timesonline.co.uk/printFriendly/0,,2-528-1367297,00.html

So any idea on the possible opening price yet ?