Timeweave, which owns half of racecourse TV Channel TurfTV, has rejected the 22p a share cash offer from major shareholder Mayfair Capital.
Graham Parr and David Craven, the independent directors of AIM-listed Timeweave, have concluded that recommending Mayfair's offer would not be in the best interests of shareholders.
The shares rose by 0.375p to 22.5p on the bid rejection, 4.75p below its 52-week high.
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Mayfair, which is controlled by Bahamas-based billionaire Joe Lewis, owns just under 30% of Timeweave. The company has received irrevocable undertakings to accept its offer in respect of another 35.6m shares, representing 15.8% of Timeweave's issued ordinary share capital.
The bid terms put a price of around £50m on the AIM-listed tiddler. That valuation is too low in the opinion of Messrs Parr and Craven, as it does not reflect the "full value inherent in Timeweave's investments", which principally comprise a 50% holding in Amalgamated Racing Limited (AMRAC), a 49.99% shareholding in DCD Media and the wholly-owned sports corporate risk business, SportingWins.
AMRAC holds exclusive licences with 34 racecourses to broadcast pictures, audio and data from these racecourses to licensed betting offices in the United Kingdom and the Republic of Ireland on its dedicated television channel, TurfTV. DCD Media is an AIM-traded independent TV production, rights and distribution group, and SportingWins covers corporate risk exposure to clients based on sporting events.
While acknowledging that the 22p a share offer represents a premium to the 19.5p at which Timeweave's shares were trading on September 5th, the day before Mayfair's approach became public knowledge, it is still a valuation which only reflects the early stages of implementing Timeweave's stated strategy, according to Parr and Craven.
The statement from the independent directors noted that the offer represents no premium whatsoever on the 12-month volume weighted average price of Timeweave prior to September 5th, 2012, and is a discount of around 5.2% to the 24-month volume weighted average price of 23.2 pence per Timeweave share prior to 5th September 2012.
Mayfair is an investment vehicle controlled by Joe Lewis, who has a track record with sporting investments as he is the major investor in Tottenham Hotspur football club.
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