We previously reported on Gate Ventures (GATE:AIM) when it was a cash shell whose share price exploded out of the tracks following a March IPO - today it announces its first really significant transaction. It is paying £2.6 million to take a 20% stake in TV production studio Infinity Creative Media.
The shares are currently suspended because nomad Beaumont Cornish stood down on 22 June and is yet to be replaced. Before the suspension the shares were trading at 315p, valuing the company at an eye-watering £103 million. If there is no replacement nomad by Thursday (23 July) the shares will be automatically delisted under AIM rules. A spokesperson for the company says investors can expect another announcement before then.
Chaired by TV veteran Michael Grade, Infinity is valued by this transaction at £13 million whereas according to Companies House data its 2014 net worth was £10,104 (in fairness most of its assets are likely to be intangible). Infinity’s founder is Russ Lindsay, a former manager of Ant & Dec, Simon Cowell, Phillip Schofield and Piers Morgan. It has four original television formats currently in production, these being The Classic Car Show, The Wine Show, The Art Show, and The Luxury Lifestyle Show. Further series, including The Football Show and The Theatre Show, are currently in development.
The plan is for Infinity to take advantage of Gate Ventures' 'expertise and connections' in China. Jun Zhu, executive chairman of Chinese e-commerce business GNet, has a 17.2% stake and has been proposed as a non-executive chairman of Gate.
Current chair Geoff Morrow says the company is in ‘detailed discussions’ on three other media investments with terms ‘agreed in principle’, whether these investments will be made as a public company remains to be seen.