ONLINE music store 7Digital has signed a letter of intent for a reverse takeover of UBC Media, the Aim-listed content group that yesterday reported a widening statutory loss of £620,000 during the last six months.
Discussions between the two media firms are ongoing but the companies said they are looking to complete the deal by 30 April, creating a company with customers ranging from the BBC and Yahoo to Samsung and HTC, with operations in 42 countries.
“I’m very happy that we are able to help 7digital’s impressive expansion and that we have agreed to try and make our two companies one. The union of content and technology skills created by the potential merger of UBC and 7digital, would create a company with genuine global scale,” said UBC chief executive Simon Cole.
UBC yesterday reported its revenue fell 30 per cent to £1.53m during the six months to 30 September with its cash holdings falling 29 per cent to £1.82m.
On the proposed takeover 7Digital chief executive Ben Drury said: “Radio, in particular, is an area where we see a lot of future opportunities, and we are thrilled that our new strategic investor and partner, UBC, shares this vision.”
FinnCap analyst Lorne Daniel described the new company, that could be created from the deal, as an intriguing opportunity for the market: “UBC has transitioned away from being a content supplier, towards being the digital platform provider… this deal would accelerate that overnight. UK investors don’t really have a similar digital content offering in the market.” The firm’s shares were suspended for yesterday’s trading.