Scoot rejects “wholly inadequate” Vivendi offer
- Added:
- Apr 30, 2001
The bid, which came late on Friday, was publicly announced after Scoot itself confirmed on Friday morning that it was in preliminary talks over a sale of the whole company. Vivendi, already has a 22.4% stake in Scoot and is its partner in the Scoot Europe joint venture.
However, Scoot said such an offer, which valued it at 103m, “would not reflect the underlying value of the company”. Scoot shares this morning stood at 14.25 pence per share, just outside Vivendi's offer price.
The company now reported to be considering a sell-off of its Loot classified advertising division, which it bought in July last year for 5m Scoot shares and approximately 177.5m in both cash and loan notes.
Scoot appointed Merrill Lynch back in March to carry out a strategic review of the company, but at that stage quashed suggestions that the move was a prelude to a sale. However, speculation of talks continued, with Vivendi looking the most likely buyer.
In the original terms of the joint venture between the two companies, set out in January last year, Vivendi was to contribute 130m out of a total 200m to the project over a three year period, taking a 9.8% stake in Scoot.
Scoot posted losses of 71.5m for the 15 months to 31 December, against revenues of 24.1m; 33.0m of this loss was incurred in the final three months of 2000. As at the end of the year, it had 4.9m cash remaining.
Despite problems with the rollout of version 2 of the service, which stymied revenue flow, much of the loss was due to 16.1m goodwill amortisation from the acquisition of Loot, and another 8.0m from exceptional charges, including a write down of its investment in Pointserve.