Scoot.com denies takeover rumours
UK online directory service Scoot.com has denied it is in takeover talks with France's Vivendi, throwing cold water on a rumour that has contributed to a surge in dot-com shares this week.
After first refusing to comment on the takeover report, first published in the Sunday Telegraph, Scoot said there has been no change in its status with regard to Vivendi since July, when Vivendi agreed to spend an additional £198m to buy 22.4 percent of Scoot. Scoot used the funding to buy Loot, a popular classified-advertising periodical and online service.
Shares in Scoot soared 50 percent on Monday after the Vivendi merger report. The Sunday Telegraph said Vivendi was expected to pay £1.3bn or 300 pence per share for the portion of Scoot it does not already own. Scoot shares surged to a high of 200 pence each, up 63 percent on Friday's close, before easing back to around 190p, valuing the company at more than £1bn.
"Industrially it would be a good move as Scoot has a lot of expertise and there would be an advantage in Vivendi owning 100 percent of that expertise rather than 22 percent," said analyst Pierre Coiffret at BNP-Paribas in Paris. "But financially it's peanuts and won't do much to Vivendi's share price."
Monday Vivendi shares were 0.7 percent higher at 95.85 euros.
The Telegraph said Vivendi would make either a full offer for the remaining shares or inject its own businesses into Scoot to increase its stake and then launch an offer for the rest. It said the deal would value Scoot at £1.7bn. The newspaper added that Vivendi was likely to relist the British-based Internet firm once it had been integrated with some of Vivendi's similar operations.
"The gap between what Vivendi thought of Scoot and what the market thought of it couldn't continue," said Nick Bubb, Internet analyst at SG Securities. "Vivendi sees Scoot as a way of leveraging its media assets in France."
Scoot, which runs Yellow Pages-style directories on the Internet, last Thursday said subscriber numbers were rising and it hoped for positive cash flow earlier than expected. But the company has suffered from falling revenues and growing losses, which it attributed to technical troubles with a new version of its Web Site.
Operating loss for the first nine months of the year were £16.6m, 56 percent higher than a year before. Revenues for the period also fell by 38 percent to £8.2m. Scoot aims to earn commission by referring users to businesses. Its subscriber base grew to more than 23,000 in the third quarter, up 16 percent from the second quarter.
Reuters contributed to this report.
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