8th May 2008 07:01
UBC Media Group PLC08 May 2008 UBC Media Group plc "UBC" or "The Company" UBC Media Group plc Announces Letter of Intent to Sell Commercial Division to Global Traffic Network Inc. London, May 8, 2008 - UBC Media Group plc (UBC.L), the supplier of audio contentand broadcast data software to the radio industry in the UK, announces that ithas signed a letter of intent (the "LOI") with Global Traffic Network, Inc. ("GNET"), a Nasdaq listed leading provider of custom traffic and news reports toradio and television stations outside the U.S., under which GNET has agreed,subject to contract and UBC shareholder approval, to acquire the CommercialDivision of UBC Media Group plc ("UBC") via a purchase of the share capital of awholly owned subsidiary of UBC. Pursuant to the terms of the LOI, it is intended that GNET will acquire UBC'sCommercial Division for £15 million, of which, £1 million may be satisfied inthe form of Global Traffic Network stock at GNET's sole option. The commercialdivision of UBC supplies traffic, news and entertainment information toapproximately 250 radio stations in the United Kingdom in exchange forcommercials that are then sold to advertisers. The planned acquisition issubject to completion of due diligence and negotiation of a mutually acceptableshare purchase agreement and is expected to close, subject among other things toapproval by UBC's shareholders, on or before 31 July, 2008. Upon entry into the letter of intent, GNET deposited £350,000 into an escrowaccount, which amount will be credited towards the cash purchase price uponclosing of the transaction. The deposit is refundable if either UBC elects notto proceed with the transaction or if GNET elects not to proceed with thetransaction based on the failure of UBC to satisfy certain conditions specifiedin the letter of intent. The deposit will be forfeited by GNET if it elects notto proceed with the transaction for other reasons. Subject to specifiedexceptions, GNET has agreed not to solicit the customers of UBC's commercialdivision for a period of six months following any election by the Company not toproceed with the transaction, regardless of the reason. Simon Cole, Chief Executive of UBC commented: "The commercial team at UBC has spent 12 years building up the leadingnetworking business in the UK and now it is time for that to be part of a biggerinternational operation. I'm absolutely delighted to be working with GlobalTraffic Network to make that happen and to demonstrate to shareholders the valueof what we have created. The UK radio market is developing very fast asconsolidation takes hold and I am very confident that GTN can look forward tomaintaining and building the strong business we have developed here." William L. Yde III, Chairman, Chief Executive Officer and President of GlobalTraffic Network, commented: "We are extremely excited about the acquisition of the commercial division ofUBC, as it will dramatically increase our footprint in the United Kingdom,adding approximately 250 radio stations throughout the United Kingdom. Withapproximately $22.7 million in annual revenues and approximately $1.8 millionnet contribution after overhead, the acquisition not only significantly expandsour business in the UK, it dramatically increases the size and scope of GlobalTraffic Network as a whole. The stations currently serviced by the commercialdivision of UBC have a non-duplicated reach of approximately 16.7 millionlisteners weekly, which is greater than our combined reach in Australia andCanada." Mr. Yde continued, "While we are paying a premium for Unique, we believe thatthere are significant synergies with both our existing business and our TrafficRadio Service Contract with the United Kingdom Highways Agency that is set tolaunch on July 1, 2008. We also believe there is significant upside in thecurrent station contracts and potential to add additional stations to ourexpanded UK operation. We have always seen the UK as a huge opportunity for us,and we believe this acquisition is the best strategy to take advantage of thatopportunity." Closing of the contemplated transaction will be contingent upon, among otherthings, satisfaction by GNET of its due diligence investigation, as well as theparties' negotiation and execution of a formal definitive purchase agreement(containing warranties, representations, indemnities, covenants, conditions andother terms customary for a transaction of this size and nature) and consent ingeneral meeting from UBC's shareholders if required. The Company will post anappropriate circular to shareholders containing a full description of the termsof the definitive purchase agreement and a notice convening an extraordinarygeneral meeting of shareholders to approve the transaction as and when detailedterms have been agreed. The Board of UBC is intending to conduct a strategic review of the businessfollowing this transaction. The Company is reviewing the timetable for thepreliminary announcement of its Final results in the light of this transactionand will advise the market of the intended date for publications in due course. ENDS Enquiries: Simon Cole, CEO UBC Media Group: 020 7453 1600 or [email protected] Verity Williams, Portland for UBC: 020 7404 5344 [email protected] Mark Percy/Sarah Jacobs, Seymour Pierce: 020 7107 8000 About UBC Media Group UBC is quoted on the London Stock Exchange's AIM market. The Group is the marketleader in the supply of audio content and broadcast data software to the radioindustry in the UK. In addition to the entertainment, traffic & travel andnational news services provided to commercial radio, the Group is the largestindependent producer of radio programming for the BBC and the UK's leadingsupplier of digital radio scrolling text and EPG software. It is also part ofthe MXR Regional Multiplex consortium, the 4Digital National Multiplexconsortium and has recently launched 'Cliq', a service that creates ane-commerce platform for radio. www.ubcmedia.com About Global Traffic Network Global Traffic Network, Inc. (Nasdaq: GNET) is a leading provider of customtraffic and news reports to radio and television stations outside the U.S. TheCompany operates the largest traffic and news network in Australia, operatestraffic networks in seven Canadian markets and has recently commenced operationsin the United Kingdom. In exchange for providing custom traffic and newsreports, television and radio stations provide Global Traffic Network withcommercial airtime inventory that the Company sells to advertisers. As aresult, radio and television stations incur no out-of-pocket costs whencontracting to use Global Traffic Network's services. For more information,visit the Company's website at www.globaltrafficnetwork.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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