Internet Business Share Discussion Threads

[omlaysause] 14/12/2007 10:41

We were told that IBG were taking a new approach and investing over the short to medium term for the increased benefit of the shareholders. We're how long into that .... 3-4 months and now suddenly IBG feel that a merger with TMN is going to be better idea.
That to me seems that they have realised they aren't going to turn this around with their new focus/plans or whatever the hell it is.

I've actually been behind Maz since I bought into IBG over 4 years ago but I think what has happened over the past 6 months is a bloody disgrace!!!

First off we get that ridiculous RNS saying we MAY have a problem with profits and then to say it could be effected for 2 years, which as we all know, killed the share price there and then. Coupled with the strategic review which turned out to be a complete waste of time.
We are then told, don't worry lads, we've got some great ideas and you'll all reap the benefits if you stick around for the next 2 years.
Then a few months later, do you know what, we're just going to sell up with no benefit to the IBG shareholders in the deal, it's a simple swap of IBG to TMN.

I'm now going to hold shares in a company I don't know and seriously doubt will give me the return I expected from IBG.

Obviously Maz and the board realise that don't have the ability to take IBG to the next level and believe TMN is the answer. I think Maz also knows why he probably isn't going to be on the new board because he's better sticking to the techie side of things and letting the managers manage, hopefully TMN can.

I can see the benefit of being involved with TMN but I still can't see it returning 4 or 5 times it's level from here but who knows ........ hope I'm wrong, I really do.

[bonio10000] 14/12/2007 10:30

"seriously powerful"

it is hardly google.

[baheid101] 14/12/2007 10:24

Hi everyone

So its not a cash exit for existing IBG shareholders at a considerable premium to the depressed share price. If that is what folk were holding out for I can understand the disappointment.

What this does do is create a seriously powerful combination of online marketing capabilities under the one roof with significant synergies.

Media Assets - TMN have excellent capabilities at building high traffic websites (mutualpoints,plum-offers). IBG would realistically have needed to hire expensive talent in this area. Hard synergies immediately available are to increase the amount of Affiliate Future merchants on mutualpoints and increase the amount of plum-offers lead generation ads and ID Factor market research client ads on netfreestuff.comm. The combined group gets to keep a much larger share of the advertising pie.

Email Marketing Affiliate Marketing cross selling - TMN are the market leader in planning, buying and managing email lists - opportunities to sell this capability to Affiliate Future's clients and vice versa. Being able to bundle capabilities together significantly strengthens the combined group's
competitive position.

[biker] 14/12/2007 10:09

Very disappointed. :(

[bonio10000] 14/12/2007 09:52

Presumably he should have just appointed more people.

So exactly can he blame for that?

[the analyst] 14/12/2007 09:48

"I spoke to Maz last week and he seemed quite down and obviously disenchanted with the stock market and the attitude of shareholders"

I'm not too surprised to hear that, Stemis. Having a board of directors with basically no previous plc experience, low on non-execs and with no separate chairman must have been tough for him. Especially as Maz was trying to perform such a lot of the day to day management of the company at the same time.

I feel it's a real shame that Maz didn't have a stronger board to advise him and take the majority of the plc strain, it could have made life much easier. But then what do I know? He may have found it more stressful to have had to trust others in making decisions about his company.

I certainly hope that Maz is happy with his decision to sell IBG - he does come over as a very nice chap and deserves to benefit from all the hard work he has put into building the company.

[bonio10000] 14/12/2007 09:28

The overriding view i get of the last 12 months is that the IBG board really have no idea what they want. The number of about faces is well documented and this is another one.

Whether that breeds condifence or not in this decision is open to debate.

Why does Maz care about the stock market if he is in it for the long-term and it is rosy?

I have a nagging feeling that perhaps they were trying to cash in whilst everything was getting purchased on high multiples and maybe the business was not worth that.

[stemis] 14/12/2007 09:25

I spoke to Maz last week and he seemed quite down and obviously disenchanted with the stock market and the attitude of shareholders. Clearly he's had enough of being a plc director and just wants to get on with the job of running AF. I'd be very surprised if he wasn't offered a position as director of TMN, so I assume he turned it down.

I can't say I'm over the moon with it all. I'm exchanging a shareholding in a company I think I know well with one in a company I know not at all. IBG shareholders have taken the pain of the decision to reinvest in the business and now will get only 30% of the upside. We are now tied more to the fortunes of the TMN business. According to broker forecasts that looks good, but if I wanted TMN shares I would have bought them.

On the plus side, being part of a bigger group gives:-

1. More liquidity to the shares
2. More resources/a bigger balance sheet for acquisitions/investment/expansion
3. Potentially more institutional interest (I notice TMN have 3 analyst forecasts and non executives!)
4. More interest as an acquisition for larger marketing groups. Its now a £35m turnover group.

Clearly there must be some cost savings and opportunities to cross sell.

[the analyst] 14/12/2007 09:22

How big is mutualpoints, hirsch?

Would they be considered a superaffiliate?

[hirschnathan] 14/12/2007 09:18

On second thoughts it may not be such a bad idea.

Tmn which has a very large advertising base
can attract more merchants to af,
get all the override, currently doesnt get the override.
promote the travel sector

I imagine tmn have enough clout to force some major publishers to join the af network.

[bonio10000] 14/12/2007 09:13

Yes - if you take half the 80% increase, i.e. 40%, then IBG has underperformed the market.


UK online sales topped £4bn in a month for the first time as wet weather in July drove shoppers on to the web, according to latest figures from online retail body IMRG.

Internet sales surged 80 per cent from £2.34bn in July 2006 to £4.2bn, with electrical goods (up 102 per cent) and clothing (up 56 per cent) the biggest improvers.

The growth is almost double that recorded in previous months, said IMRG chief executive James Roper, and was driven not just by the weather but by improvements to retail web sites and faster domestic internet connections.

'July's extraordinarily strong market growth spotlights the high level of consumer demand,' he said.

'But we still have nowhere near enough capacity to meet shoppers' appetite for e-retail.

'With nearly half of homes yet to acquire broadband and massive potential for improvement available in every aspect of it, strong e-retail growth is set to continue for many years to come.'

Overall retail sales also increased during July, according to the Office for National Statistics, but it attributed the growth to discounting and sales as retailers tried to lure consumers back to the high street.

[the analyst] 14/12/2007 09:11

"is this final?"

Looks to be final hirsch, unless a better offer is made. A higher offer is, of course, possible because the review earlier in the year will have brought IBG to the attention of many other potential buyers that may want to offer more than the current £10m valuation.

Overall, the deal looks like a good one to me - I see TMN as being just as undervalued as IBG is currently. Maybe more so.

Just from my first impressions and broker estimates, we could even be looking at the group making £8-10m EBITDA in the 2008-2009 financial year if the synergies and cross-selling opportunities come good. I think the combined market cap of the two companies is currently around £35m.

Your £2 target within two years does not look pie in the sky omlaysause

[hirschnathan] 14/12/2007 09:10

30% not bad?

[bonio10000] 14/12/2007 09:10

So much for organic growth.

Really can't be bothered to read through it all - turnover growth for IBG was hardly great was it compared to general online retail growth - and no idea what the merger will bring.

Too hard to focus.

[cgequityinvest] 14/12/2007 09:06

This looks a very poor deal for minority shareholders and I have to question the motives of the board. It just does not seem to add up - Maz saying the share price was way too low only six months ago and now selling out at half the price. Also the timing - selling out at such a jittery time in the market. Lets hope it stimulates another counter offer.

[stemis] 14/12/2007 09:00

TMN and IBG have different year ends but luckily IBG's year end is the same as TMN's interim balance sheet date. Consequently its possible to calculate a running annual P&L to 31.10.07 for TMN to compare to IBGs full year results (just issued).

The two seem to be on similar historic ratings:- Market Adj EV/
Cap Cash EV EBIT Adj EBIT
TMN 24,524 1,040 23,484 3,777 6.2
IBG 9,842 1,691 8,151 1,422 5.7Its unfortunately difficult to compare forecasts because of the different year ends.

[hirschnathan] 14/12/2007 08:58

is this final?

[moob] 14/12/2007 08:49

lol. crazy offer. the only one available for IBG was to take untradeable paper in the form of TMN. lolol. Will Maz be quietly selling his stake in the market afterwards.....as he will not be a director....

[omlaysause] 14/12/2007 08:47

Looks like a disaster to me. I was hoping for IBG to be sitting at 40-50p within the next 2 years. So now we're looking at TMN at 48.5p with a quarter of the numbers of shares ..... not good unless they expect the merge company to hit the £2 mark!!?

[the analyst] 14/12/2007 08:30

In answer to my own question, it seems the 'other shareholders' are William Currie and Hargreave Hale.

Were you contacted, Ken?

[nghomi] 14/12/2007 08:29

I am disappointed with this offer. TMN has been going down for the last 6 months and I fear the combined companies would carry on the same trend for a while. I need to read the results during the weekend but it seems that profit is only £922k which is less than last year. It seems that this is a defensive merger in anticipation of slow down in the market in 2008 imo. I would post further later after I read more about the results and TMN!

[valustar1] 14/12/2007 08:05

Perhaps they have not asked them yet?

[the analyst] 14/12/2007 07:59

"TMN has received irrevocable undertakings from certain IBG Directors and
Connected Parties to vote (or procure the vote) in favour of the Scheme in
respect of 28,649,270 IBG Shares, in aggregate representing approximately 37.11
per cent. of IBG's existing issued share capital. TMN has also received
irrevocable undertakings from other IBG Shareholders to vote in favour of the
Scheme in respect of 8,701,000 IBG Shares, in aggregate representing
approximately 11.27 per cent. of IBG's existing issued share capital. Such
undertakings from these other IBG Shareholders will cease to be binding,
broadly speaking, in the event of a higher competing offer being made for IBG."

hmmm, are the 'other IBG shareholders', representing 8.7m shares hoping for a better offer then?

Are you one of those shareholders Ken?