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.

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!

How much more of the company, would the directors have to 'cream off' before most apathetic shareholders became irritable? The 16m shares, represents nearly 10% of the current Yoomedia. At what point, do you stand up and be counted? 20% 30% or more?

The issue is no longer the merger

The issue are the options and the fact that we are not being given the opportunity to vote through the merger and reject the options.

This is the issue which needs discussing.

I'm sure it is not legal.

I'm positive, if the correct legal advice is sought, a High Court Injunction, could be obtained and the EGM postponed.

Either Yoomedia back down OR they risk the suspension of the EGM until well into the New Year.

New legal precedents are set all the time.

The objectives of any legal action would be

1. The shareholders are given the choice of voting for the merger, but rejecting the options.
We would be prepared to back down and withdraw our legal challenge, IF the options price is amended from 15p to 20p

All existing votes would be invalid and the whole process started again.

Comments please.

IPublic

I'm afraid there is not a lot that can be done except raise as much stink as possible in order to shame them into an about-face.
I took the matter up with a newspaper that will be nameless since our contacts were confidential. I quote a part of the reply I had from their financial editor:
"issuing options at 15p seems justifiable to me since that is the price at which the acquisition has been carried out.
Don't get me wrong - I will always defend the interests of retail investors if I believe they are being stiffed by the big boys in the City and have a proud record of having done so during the last five year. But, for the life of me, I can't see that this is necessarily happening here"

I don't wish to discourage you, quite the opposite, but it illustrates the sort of problem you are up against. That is why I decided to vote with my feet.

The problem is post 369.

Perhaps you can contact him again and question the possible legality?

The issue is the options and the fact that we are not being given the opportunity to vote through the merger and reject the options.

All perfectly legal I'm afraid. Immoral, in my view, as I have said before, but legal. The only thing that caused raised eyebrows was the amount allocated to advisors fees which was considered high for the size of the deal.

Have written, as promised, to Shares Magazine as follows:

Dear Sir

Thank you for the well-researched response to my letter by Timon Day regarding the share placement and acquisition by Yoomedia. However, the MoneyAM bulletin board is still collectively up-in-arms. It is not just that the 15p placement price, compared with a pre-suspension price of 23.5p, is deemed unnecessarily low, although that is very clearly the case. Whilst you say that the directors were also diluted, they have, in fact, awarded themselves 16 million of share options, representing some 10% of the existing share capital. This will go through as one of a raft of measures within a single proposal at the EGM on 20th December. So there is no option of voting against the share options whilst supporting the acquisitions and company restructuring.

A considerable number of small shareholders, representing some 4.65 million shares, or approaching 3% of the share capital, are against what is seen as feathering their own nests by the directors at the expense of the ordinary shareholder. 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 the company? Please use the influence of your magazine to encourage your readers who bought on your Play of the Week recommendation to vote against the resolution.

Eric Robson

YooMedia Acquires the Digital Interactive Television Group
--YooMedia CEO, Docherty, Discusses the Acquisition with [itvt]

ITV content company, YooMedia, continues its acquisition spree. (Note: in October, the company announced that it was acquiring MMTV, the company that was awarded a 3-year contract to develop and run the UK National Health Service's long-planned, "walled-garden" ITV health information service, NHS Direct Digital TV; in July, it announced that it was acquiring mobile marketing company, Whoosh; in June it announced that it was purchasing the Dateline and Club Sirius brands from OneSaturday and also purchasing dating service operator, Jiles Limited; in March, it announced that it was acquiring betting channel, Fancy a Flutter; and in December, 2003, it announced that it was acquiring ITV games channel, GoPlayTV, from Sony.) The company said last week that it will purchase ITV infrastructure specialist, the Digital Interactive Television Group (DITG), and its subsidiary, the Gaming Channel, in a deal worth up to 28 million. To consummate the deal, YooMedia will provide DITG's owners with up to 120 million consideration shares (including deferred consideration shares), and approximately 5.3 million in cash, and will also repay DITG and Gaming Channel loans totaling approximately 4.7 million. In addition, the company plans to raise 25 million via a conditional placing of an additional 166,666,667 placing shares, priced at 0.15 a piece: 10 million of the cash thus raised will be used to fund the cash and loan-payoff elements of the DITG purchase, and the rest will be used for "ongoing working capital requirements." The deal and the share placements must be approved at an extraordinary general meeting of shareholders, scheduled for December 20th. YooMedia and DITG say they expect the merged entity, which will be the largest ITV company in the UK (excluding BSkyB), to achieve positive cash flow by next March. Taken together, the revenues of the 2 companies over the past year exceeded 60 million.

DITG provides software sales and support and various broadcast infrastructure services for a number of ITV channels (including those owned by the Gaming Channel), and has also developed several interactive advertising and scheduling solutions for broadcasters, including Channel 4, UKTV and Five. Most significantly, it is the only 3rd-party alternative commercial provider to BSkyB of return-path services (note: its return-path customers include the BBC, Channel 4, and Zip Television). The Gaming Channel owns and operates 2 interactive betting channels on Sky--Avago and William Hill TV (the latter is a joint venture with the bookmaker of the same name)--and licenses various wagering formats and games to 3rd-party channels. "This merger creates a powerhouse with market leadership in the independent interactive digital industry," YooMedia executive chairman, Michael Sinclair, said in a prepared statement. "Together we have the brands, content, distribution, technical know-how and the relationships with platforms and broadcasters to satisfy the increasing appetite for interactive applications in TV, radio mobile and on the Internet." Trading in YooMedia shares was interrupted last month after news of the acquisition leaked out; however, it resumed November 26th.


[itvt] asked YooMedia CEO, David Docherty, what had led to the companies' decision to merge: "We'd been using their backchannel a lot, so we had a working relationship with them," he said. "We just got talking about it and thought, 'What a good idea!' Our strengths are very complementary: we're really strong on the dating and mobile side, and they're strong on the gambling and digital solutions side. Both companies have spent a considerable amount of time and money to get to where we are today, which I think, oddly enough, gives us strength going forward. With the 2 biggest ITV companies having merged, the bias against anybody else coming into our markets is really tough." The merged entity, he added, will be able to "provide solutions from digital television all the way through mobile and all points in-between. We'll be able to cross-market, cross-promote and cross-database. And I think that's going to be seen in the market as really innovative: that one company can come in and solve all your problems in one gulp, so to speak."

Docherty told us that DITG's managing director, Neil MacDonald, will become deputy chief executive of YooMedia, and that The Gaming Channel's managing director, Damian Cope, will become managing director of gambling and games: "We're going to put all of YooMedia's gambling assets into his group," he said. DITG founder, John Swingewood, meanwhile, will join YooMedia's board as vice chair and executive director. [itvt] asked Docherty how the 2 companies will be physically merged: "YooMedia's headquarters will become the headquarters of the new company," he said. "We'll retain DITG's studios in Wapping [East London] and their development house in Exeter, and so on. But it will definitely be one company, not two."

We asked Docherty what his immediate priorities will be in order to ensure that the merger is successful: "One will be integration, both at the cultural level and at the business level--getting the businesses together as one business," he said. "Another will be financial discipline--making sure that we're in this business to make money, and not just to deploy technologies. And another one will be making sure that the culture works--creating a good, vibrant culture that focuses on innovation. I think these are the 3 things that will preoccupy me for the next 4 months." We asked Docherty what he considers the cultural differences between the 2 companies to be: "Being a public company like YooMedia and being a private company like DITG are just 2 different things," he said. "We obviously have to spend a lot of time thinking about the share price, whereas a private company doesn't have those kinds of issues. Other differences are that they have a much bigger technology division than we do--we had increasingly positioned ourselves as an entertainment company rather than as a technology company. But in general," he continued, "I think the fact that we have different cultures and values will be beneficial going forward. Because, when you put together 2 sets of values and build on them, you can get a really powerful culture."

[itvt] also asked Docherty which areas of interactive TV he believes YooMedia will be focusing on in the coming months: "We want to push out into all sorts of areas--but particularly in the mobile space," he said. "We've been getting incredible responses for something called 'The Walkaway Question' that we've been doing with the show, 'Who Wants to be a Millionaire.' [Note: the Walkaway Question is a new feature on the show, wherein viewers are invited to text in an answer to a question, that a contestant was unable to answer, for a chance to win 1,000.] So we're now very focused on this issue of how you use a mobile phone to interact with live TV shows."

keef

A really interesting read! - thankyou very much. It puts flesh on the bones of the restructuring operation. Docherty talks about 4 months for the restructuring process which I assume can't start, except for the planning, until the EGM is out of the way. So the hit in costs should be pretty well out of the way by the end of the first quarter.

Eric

My letter published in Shares today under title 'Directors Dealings'. Although without comment, I feel it adds to the cause. YOO shares, meanwhile, have settled down - I wouldn't expect any more action until the EGM and consequent publicity. I am hoping that most of the placing buyers are institutions coming in as an investment. Given that we know that Evolution will be making a statement on prospects, the price could move ahead. I would guess that the maximum for the cap. would be 150K at this stage which corresponds to a diluted price of 33p. Could be on the cards (or 'in the cards' for us gamblers?)

Eric

http://www.dtg.org.uk/news/news.php?class=countries&subclass=193&id=512


ITV 'plans interactive gaming channel'


ITV is said to be planning an interactive quiz and gaming channel as it looks for additional sources of revenue to top up its advertising income.

The digital channel would offer betting interactivity on top of quiz and gaming shows, and could launch next year, according to Broadcast magazine. The channel could be called ITV4 or ITV Gaming.

The broadcaster is said to be planning to test run the concept first on late-night ITV1. ITV recently appointed Debbie Mason, founder of the interactive betting channel Avago, its interactive commissioner.

Either very good news or bad news.

Are Yoomedia in the mix?

Well we already have strong links with ITV, due to the dating agreement, announced in October. Yoomobile also work with ITV, for the text game on 'Millionaire'

Debbie Mason, a key employee of AVAGO, left for ITV recently. The new channel will need partners, content producers and it is possible the technology, products of TGG and DITG will be used, needed. Was Debbie Mason's departure designed with a view towards launching the new channel for ITV and winning new business for the enlarged Yoomedia group.

Yoomobile will be the perfect complement for the new quiz channel ITV4.

Mr Dcherty has recenty stated "We want to push out into all sorts of areas--but particularly in the mobile space" "it will be a large part of our business, at by the end of 2005" "So we're now very focused on this issue of how you use a mobile phone to interact with live TV shows."

Are Yoomedia involved? Quite possibly!

We had better hope they are, although considering the relationships already in place with ITV and the Debbie Mason connection, the odds favour Yoomedia's participation, more than not.

Will the directors tell us either way, will they hell!

MOST IMPORTANTLY.

TriggerTV/Whoosh can provide ITV with a 'live' return path for viewers watching in analogue and Freeview. I sincerely hope ITV and Yoomedia are working together on this project. Might explain why 25m was raised so quickly!

Return Path

The return path division of DITG provides the only third party commercial
alternative to Sky for activating the return path from a set top box. By
providing this service it is able to handle financial transactions, voting and
other responses made by a consumer on behalf of certain broadcasters, including
the BBC.

We know ITV and SKY are at loggerheads at the moment.

http://www.dtg.org.uk/news/news.php?class=search&subclass=ITV&id=461

ITV may choose Yoomedia, for it's return path requirements for both business and working relationship reasons.

Debbie Mason's job is already made easier, as she has an alternative return path in mind, if ITV decide to dump SKY. Knowing where Debbie Mason has gone, surely the DITG directors (soon to be Yoomedia directors) are working closely with Debbie Mason and ITV. The amount of potential business up for grabs is huge!

ITV4 will be the brand, that's all. Behind the scenes, someone must provide the return path technology and content. Will they choose Yoomedia? I consider there is a very good chance of significant business for our mobile and gaming divsions, at the very least.

Perhaps most importantly, will ITV chose Yoomedia to provide the return path, dumping SKY in the process? If so, it will open the floodgates for other independant broadcsters, program content producers to follow, breaking SKY's stranglehold.

IF a deal can be made with ITV, then the whole merger takes on a different complexion entirely. Is it in the pipeline? Only the directors know!

ITV and the new Yoomedia, working together, COULD become a very powerful force indeed! After ITV4, why not ITV5, ITV6, ITV7...............all interactive, presenter led channels.......if Yoomedia are involved, then it's buy, buy, buy!!!