NewMedia Spark: the saga continues

AIM-listed technology investor NewMedia Spark is still debating the possibility of a takeover. Despite the fact the group does have cash reserves, market conditions are difficult and the team has been forced to look at alternative plans.

The main contender for NewMedia Spark was Collins Stewart, which was mainly interested in the group for its 11.36 per cent holding in Tullet & Tokyo Liberty, the largest investment in NewMedia Spark’s portfolio.

Collins Stewart has made a formal offer for Tullet, which is now valued at £24.5 million in an all-share option from the sale or £23.3 million if it takes a mixture of cash and Collins Stewart shares.

NewMedia Spark has cash reserves of £31 million, but this excludes the portion of Tullet sale proceeds if the deal goes through. The firm’s interim figures to September 2002 posted a drop in net asset value per share to 13.4 pence from 32.3 pence in September 2001. Over the past year the firm has slowed down on new investment activity and is concentrating on its current portfolio. Director Joel Plasco says: “Unfortunately we sit within the public markets and our shareholders are not used to the way private equity works. Our oldest investments are three years old and are in a growth phase. We are by no means downbeat about our portfolio, but the public market investors don’t see it that way.”

The group is open to takeover offers but Plasco stresses: “The only reason we would consider a takeover offer is for those shareholders who don’t want to be shareholders in a private equity fund. It might be a useful exit for them. Also it would be a useful way of taking us out of the public market.”