CMG weighs up potential sale

Catalyst Media Group, which owns an online gambling platform and a 20.54% stake in outside sports and betting broadcaster Satellite Information Services (SIS), has announced that it has commenced a review of its strategic options, including a potential…

Catalyst Media Group, which owns an online gambling platform and a 20.54% stake in outside sports and betting broadcaster Satellite Information Services (SIS), has announced that it has commenced a review of its strategic options, including a potential sale of the company.

CMG has appointed Rothschild as financial adviser to advise the Board on the process. The media group is listed on London’s AIM exchange and had a market cap of around £20m, prior to its share price spiking following the announcement.

The core business of SIS, which represents CMG’s largest asset, is providing betting shops with outside broadcast TV production services, which it delivers via satellite. In April 2008, the company significantly expanded its offering by acquiring the BBC Outside Broadcasts division, including its fleet of outside broadcast trucks, and it now supplies live news and sports coverage for events such as Formula 1 and the Rugby World Cup to broadcasters including BSkyB, BBC and ITV. SIS recently launched services in the US in partnership with satellite operator Intelsat.

Catalyst bought its holding in SIS from United Business Media for £23m in 2005. The other shareholders in SIS include the bookmakers Ladbrokes, William Hill and The Tote as well as a number of UK racecourses.

CMG has a free float of approximately 21.24%, with Gartmore Investment Management its largest investor with a 25.93% holding. Property developer and non-executive director at CMG, Melvin Lawson, is the second largest shareholder with 12.85% of the company, while other board members, non-executive director Mark Hawtin, a partner at hedge fund Marshall Wace, and chairman Michael Rosenberg, who co-founded TV-am and has been chairman of Numis Corporation and Boomerang Media, own 7.14% and 0.04% respectively.

The Times newspaper recently claimed that billionaire brothers David and Simon Reuben are mooting a possible takeover bid for the company. The Reubens made their fortune through property development.