“Vision Media Group International Plc (VMG) to buy Avanti Screenmedia’s Mall business” – at least that’s the headline we think you will see from others in the next couple of weeks after yesterday’s announcement from Avanti that it was in “advanced discussions to sell certain parts of the business”
All of the clues are in the RNS that they issued when they said “Avanti has decided to focus on the leisure, retail and creative services businesses, which include the Setanta and Spar contracts”
We said over 10 months ago that both companies ought to merge their Mall businesses. In August 2007, in response to what was the first of many notices from Avanti that they were ‘urgently seeking additional funding” we wrote…
…Avanti Screenmedia are a company that need to focus on their core strengths. Here’s my two penny worth…
Their music offering to the leisure industry is not the best – the music operators should be circling to take Magnetic and MVN off of their hands. With 600 venues (and 4,100 screens) it’s a good sized network and should be bringing in some decent size monthly music revenues (mind you it is this revenue that might be keeping them afloat).
Shopping Mall TV is one of the largest Mall networks in the UK with 34 malls and a footfall of 7.8 million per week it is not insignificant. Avanti have a very good infrastructure for media sales, some good sales people on board and as previously suggested should bid for the media sales tender recently put out by ScreenFX (for MallFX). The sales combination of Shoppping Mall TV and MallFX would make a lot of sense.
In retail, Avanti have SparTV, the recently announced deal with Marks and Spencers for Kiosks, some small trials in Boots and Woolworths. All very disparate and I am sure all difficult to sell on unless one is a retail / convenience specialist.
The Setanta Sports deals is I think the jewel in their crown but I am unsure of the exact revenue that comes through from this deal.
With a market capitalisation now of just over UK PDS 1 Million I think they might be right to be be bought out completely. A digital music specialist might be interested – just to get hold of the Magnetic monthly revenue stream.
Last year of course VMG were ScreenFX and ALSO had far too many fingers in far too many pies – since then a new management team has slimmed down the organisation, done the most excellent deal with Clear Channel and really focused the business.
Combining Shoppping Mall TV (Avanti’s offering) and what was MallFX (VMG’s offering) will make a lot of sense. VMG will end up with a very, very sizable shopping mall network of almost 60 venues AND Clear Channel are going to be so, so happy having done the deal they did earlier in the year!!
No clue as yet to which shareholders will have the biggest smile on their face – ASG or VMG?
Surely investors must see the long term value in VMG by now?
We think that ASG will emerge the other end of this deal a leaner, meaner business that will probably end up going in a completely different direction to what it is today and that has to be good news for their shareholders as well.
One thing’s for sure – consolidation is happening and niche is proving to be good – didn’t we always say that!!