London-based Sports Internet Group Plc, an Alternative Investment Market listed shell company, has paid 24m pounds ($39.2m) to acquire Planetfootball Ltd, a soccer web site group which recorded revenue of just 99,000 pounds ($161,000) last year. The market reaction forced the firm’s share price down over 18% in the first few hours of trading. The firm justifies the price by claiming Planetfootball web sites have 13 million page impressions per month, making it the 13th most frequented web site in the UK, the third most popular sports site. A spokesperson for the company said that the price values each customer at around 50 pounds ($82), which, compared to a valuation of 1000-2500 pounds ($1630-$4076) per Freeserve customer, is a real bargain.
Sports Internet was set up to create by acquisition a group of sports-related internet businesses, covering fan sites and online betting and gaming. Planetfootball, which will become the group’s first trading company, runs a portfolio of 20 branded soccer web sites, which attract revenue through the sale of club merchandise. It was spun out of ISP Planet Online during its acquisition by telco Energis Plc by founder Peter Wilkinson, the brains behind Freeserve, the subscription-free ISP. Wilkinson will now become executive deputy chair of the Sports Internet board.
The acquisition was made for 15 million new ordinary shares of 1.60 pounds ($2.61) each. Sports Internet also announced Friday it is to raise 4.1m pounds with a 1 for 3 rights issue of almost three million new shares at 1.60 pounds per share.
