Deal paves way for Neo to take stake in Avanti
The share price of Britain's Avanti Screenmedia almost quadrupled today following the announcement of a strategic tie-up with Switzerland's fast-growing Neo Media that could lead to Neo taking a substantial minority share in the company.
Avanti stock, traded on London's Alternative Investment Market under the symbol ASG, touched 3.75 around the middle of the day, up nearly 300 percent from the previous day's close of 1.0. But by late-afternoon trading, the price had fallen back to 1.75 on higher-than-average volume.
More significant in the longer term than any share-price blip, however, is the deal with Neo and the apparently related abandonment of Avanti's recent plan to sell its shopping-mall digital-signage business.
Neo operates in Belgium, Germany, Italy, the Netherlands, Poland, Portugal, Spain and Switzerland as well as Canada, but to date has had no UK presence. The relationship with Avanti will now allow Neo to “obtain entry into the UK market and access...Avanti's significant client base”, Avanti said in a statement.
Neo's focus on mall and retail customers also makes it likely that it will to some extent take over the handling of the Avanti shopping-centre business while Avanti itself concentrates on its other projects.
The networks which Avanti runs or sells are mostly in bars and pubs – Setanta Sports, Music Video Network, Magnetic and Bar Bluetooth (pictured) – although it also serves two of the UK's larger retailers with SPAR TV in convenience stores and Woolworths TV in the well-known general-merchandise chain.
As part of the deal, Neo has subscribed for £300,000 ($600,000) worth of a total of £400,000 ($800,000) in new convertible loans offered by Avanti. With a conversion price of £0.01 per share, the loan could hypothetically give Neo a stake of around 40 percent in Avanti. Either repayment or conversion is due in 12 months.
Simon Rees, CEO of Avanti, said: “We see this alignment as the start of further consolidation of the digital out-of-home sector, both locally and internationally.”
www.avanti-screenmedia.com
www.neoadvertising.com
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