Catalyst Media Share Discussion Threads

[deep powder] 23/12/2006 09:49

Good post LPLP. I have been watching this share for ages and recently bought a modest holding at 2.3p. I was reasoning on a chance of doubling my money in 07' as I placed a value of 5/5.5p per share. I agree with all that you say, my take on weakness is uncertainty on 3 counts, firstly the exit of the CEO, then the Yoomedia sale and finally the Racing Post sale by Trinity Mirror. It is this last bit and the possible non payment of dividend that is key.

You would imagine that the loan agreement must have some covenants in it for possible failure to pay a full dividend. At the moment the market is valuing the equity about right given these concerns.

Any announcement of a sale of Racing Post to another buyer and I will be in for my usual weighting.

[lplp] 23/12/2006 09:15

Something is going on, we still dont know who bought the Goldman stock as WH
Ireland and friends only bought the YOO 44m shares.
With Duffen, his considerable costs and his foolish forays into online gambling out of the equation shareholders will be able to enjoy the benefits of holding the SIS stake which is what CMX should be all about anyway.
Maybe there will be an MBI, maybe it will be taken private, maybe SIS will buy back their stake or reverse into it - who knows. What is for sure is that it isnt going bust as the direction of the share price has suggested and that owning 22.2% of SIS is worth a lot more than the current enterprise value.

For the financial year ended 31 March 2006, SIS generated turnover of
#127.6 million (2005: #117.7 million) and profit after tax of #14.6 million
(2005: #11.8 million).

The imminent dividend will pay down the debt considerably to say £6m after a 50m divi (rumoured to be a lot higher) which together with the current mkt cap of circa 13m puts the enterprise value at only £20m.

On a historic (to march 06) pe of 10 the cmx stake in SIS is worth £32.2m and on a pe of 15 £48.6!!! If the growth in SIS profits continues at the same level as it grew from 05 to 06 then after March 07 results the value of that stake becomes £40.1m at a historic pe of 10 and £60.15 at a historic pe of 15.

BUY

My target share price within 6 months (in the middle of the above range) 7.5 pence

DYOR

Any reasoned views either way appreciated

[torwood] 22/12/2006 15:42

It seems our theories are starting to play out into reality (here's hoping!). Morgs - I like your idea of SIS reversing into CMX - makes sense.
I might treat myself to some more CMX for Christmas!

Merry Christmas all.

[theheadchef] 22/12/2006 13:00

Morgs............I think you may be right,it was my though also...but it may go any other way!
All of you enjoy your turkey!That's not CMX though..............

[morgs] 22/12/2006 12:17

I wouldn't read too much into Kaupthing, they are buying into anything that moves at the moment. I know as I am involved with a few of their offshore companies. They like McQuarie are like lottery winners looking for the biggest/best deal they can get their hands on.It all depends if the investment is from the core or tagged as a fund purchase, this isn't always so obvious.

PD is (still I believe) on the board of SIS, which as I noted before now has a distinct Catalyst slant to it. Here is an idea (mine not from fact/gossip) I think SIS might actually reverse into CMX to obtain a listing. They are afterall on a big expansion and divesity drive (read the 2005 accounts and this is apparent)and they are probably at the point that the next move requires serious funds and vis a vie a listing. Well saves £1m in fees by using a shell especially as the SIS board all but own it. (That is my thoughts and my questions are going to be fished along the same lines)

Merry Xmas all pubs open and Xmas starts here (well it does in Guernsey !!)

[long by name long by] 22/12/2006 10:30

Order just gone in for another 500k shares from me... this is a crazy price.

[long by name long by] 22/12/2006 10:19

Also Singer & Friedlander Investment Management Ltd are ultimately owned by Kaupthing Holdings UK Limited (Kaupthing UK) – is a wholly-owned subsidiary of Kaupthing Bank hf (Kaupthing Bank), an investment bank based in Iceland, I believe. So we have (I think, but do not know, please check this out yourself:

1 - Iceland involved;
2 - Paul Duffen resigning a day before these shares brought &
3 - Melvin Lawson an English Property Entrepreneur (???????) I do not know if he is English, but he is certainly in on property, based on the above.


Now - from the Telegraph re West Ham and the Icelandic takeover - Other figures in the consortium included Paul Duffen, chief executive of marketing and media rights company Catalyst, American sports giant IMG and an English property entrepreneur.

Any thoughts?

[long by name long by] 22/12/2006 10:06

This (IMHO, no knowledge here) is a Paul Duffen and Stephen Smith Production. It is obvious to me at least that PD resigned for a buy out, and prior to the above transactions going through. Expect activity in the near future. Why the share price has gone down not up I have no idea. The market obviously does not understand what is going on.

[morgs] 22/12/2006 09:11

LONDON (AFX) - Eagle Eye Telematics PLC said Boostmarket Ltd, a company controlled by Melvin Lawson, has exercised its options over 12 mln shares at 1.75 pence a share, raising its stake in the company to 23.74 pct

Here is a list of his UK Diretorships:-
BANTENT LIMITED -
RUSHDEN WAREHOUSE LIMITED -
BOOSTMARKET LIMITED -
BAYWORK LIMITED -
BECKMAN PROPERTY INVESTMENTS LIMITED -
A. BECKMAN PUBLIC LIMITED COMPANY -
HOLBOND LIMITED -
LOCKSTON DEVELOPMENTS (WOOLWICH) LIMITED -
AB GROUP LIMITED -
BRADSETT LIMITED -
DEYNACOURT LIMITED -
LAKEPLACE LIMITED -
BRYTRON LIMITED -
BELGRAVIA HOMES LIMITED -
VALBOND MANAGEMENT LIMITED -
ICE DESIGN LIMITED -
BANTENT LIMITED - ROSESITE LIMITED -
LAKESYSTEM LIMITED -
PRIMISTER LIMITED -
HOMESHIRE LIMITED -
TELECOM PLUS PLC -

[morgs] 22/12/2006 09:04

The Company was notified on 21 December 2006 by W H Ireland Limited that, as of
20 December 2006, Melvin Lawson and his associated companies ('Lawson') was
interested in 26,666,668 ordinary shares of 1p each in the Company, representing
approximately 3.73 per cent. of the issued share capital of the Company.

In addition, the Company was today notified by W H Ireland Limited that, on 20
December 2006, Singer & Friedlander Investment Management Ltd ('Singer') was
interested in 17,777,778 ordinary shares of 1p each in the Company, representing
approximately 2.49 per cent. of the issued share capital of the Company.

Lawson and Singer are deemed to be acting together for the purpose of this
investment and therefore own 6.22% of the issued share capital of the Company

So that accounts for some of the placement, now to find out who Melvin Lawson is.

[long by name long by] 21/12/2006 19:36

theheadchef - 12 Oct'06 - 17:22 - 527 of 707
Or you my friend.....didn't know you are a West Ham man!

This an interesting post Headchef, Given the above comments "Doing a little a bit of research I see that PD was part of or brokered the recent West Ham sale to the Icelandic group. Perhaps these contacts may provide funding for hom to acquire CMX? h"

Your post was 12th Oct... Interesting...

[morgs] 21/12/2006 15:57

Zaitoon - Of course that members list is pre Hilton and the Ladbrokes disposal. It makes sense considering how much fees they pay SIS for the in shop coverage.

What I didn't realise that SIS do quite a lot of news (non nag and dog) feeds and provide Sky with quite a lot of material.

[zaitoon] 21/12/2006 15:52

Ladbrokes own 25%.
If pg did walk it was to avoid being pushed. I would back up what Morg suggested some time ago

[morgs] 21/12/2006 14:38

So thinking on - Hilton (who no longer have any betting interest) are surly in it for the dividend.
William Hill - snap considering they pay SIS some £10m in fees a year already
That is 46.3%, which is not quite enough, throw in Caledonia and you have 5% short of a super majority which secures veto over the directors. I don't think that the divi is at risk somehow.

Reading the accounts what a business 2005 £117m in revenue 2005 y/e retained profit of £11m.

Alternateport Ltd is a owned (maj) by CMX, it carries the loan docs regarding the loan from Investec

[morgs] 21/12/2006 14:13

Help (from anyone who has done this before)
I thought I would find out who exactly owned what shares in SIS. So SIS is owned in total by Satellite Information Services (Holdings) Limited

As at the last members return these are the holdings:-

Full List of Members at 19/9/2006
P/C No Shares Holder

22.16%-- 44,322-- Alternateport Limited
24.33%-- 48,665-- Caledonia Investments Plc
0.01%-- 11-- Frontrelay Limited (SIS ESOS)
25.26%-- 50,521-- Hilton Limited
6.47%-- 12,945-- Horserace Totaliserboard Limited
21.05%-- 42,102-- William Hill Limited
0.21%-- 411-- Leicester Race Course Limited
0.12%-- 247-- Devon and Exeter Steeplechase Limited
0.11%-- 225-- East Lothain Council
0.11%-- 212-- The Bidbury Club
0.08%-- 154-- Stratford-on-Avon Racecourse Limited
0.05%-- 109-- Thirsk Racecourse Limited
0.04%-- 77-- Caterick Racecourse Company Limited
Shares in issue 200,001

So CMX's holding is Alternateport

I did this to see where the power was spread and who could influence the board in respect of a dividend payout.
I notice a distinct move towards Catalyst players such as the Co Sec has been relaced by Anne Prestwich who is Catalysts Co Sec (10/10/06)

So here is where I am confused SIS have never paid a dividend of more than £3k?

[torwood] 21/12/2006 11:31

Morgs - If he has a 12 mth notice period then if he resigns then this shouldn't mean a 12 mth pay out! If he is asked to leave then that is different but the company maintain that he left of his own accord to pursue other interests. Anyway I will recheck as 250k to a company with little cash flow is a lot.
A couple of other thoughts/concerns that I have and wonder if anyway else has any insight:
1. Doing a little a bit of research I see that PD was part of or brokered the recent West Ham sale to the Icelandic group. Perhaps these contacts may provide funding for hom to acquire CMX? h
2. If SIS acquire the Racing Post the method of funding may limit the much anticipated super dividend rumoured to be paid early 2007. Being a private company with non of the agency problems that affect listed companies SIS is free to distribute/invest profits as it sees fit and isn't under pressure to pay dividends to shareholders. How will this affect CMX and its ability to service the debt from Investec? CMX is relying 100% on this dividend to pay down the debt. Could Investec end up owning 22.2% of SIS??

Any insight on these two issues appreciated.

[morgs] 21/12/2006 09:51

torwood - PD has a 12 month notice period so he basically gets a years salary and gets to sit in his garden for a year.Spoke to my friend last night but he was stuck in Gatwick. Will keep digging.

Anyway I don't forsee any price movement unless some form of revised strategy comes out. There must be one otherwise how else did they find someone to pick up 44m shares. Will keep digging.

[holism] 20/12/2006 22:58

the price is being kept down so anybody's guess. The dividend from SIS maybe the clue.

[the_metallian] 20/12/2006 22:54

at what price an mbo? 5p was touted in the ft a few weeks ago, sounds plausible.

[long by name long by] 20/12/2006 22:33

torwood - I like your posts - I find them considered. Why would PD step down? If it is a genuine resignation then I agree CMX to be taken private. However, quite often a step down or resignation is forced, but with a financial package agreed in the background. Called a resignation, but often pushed. I have no idea which scenario this is.

[torwood] 20/12/2006 18:44

CMX to be taken private now? As we know the SIS stake is an important strategic stake in a very influential business within the racing industry. It has to be worth a lot more to someone outside the current CMG structure. Why would PD spend so much time putting this deal together simply to walk off to pursue other business interests?
Also,if PD resigned, as the company maintain, it is unlikely that he will receive any further salary payment.

long CMX

[long by name long by] 20/12/2006 16:55

Def YOO - see RNS

[zaitoon] 20/12/2006 16:19

I think there is still alot more to come on this story. SIS is a very important component in the racing industry. Seems a little lopsided with only two of the major bookmakers with large ownership stakes