The market valued mobile content player iTouch, part-owned by Independent News & Media, at almost €220 million yesterday after a rival emerged as a likely bidder for the business.
A statement from iTouch, in which Independent News & Media holds a 34.8 per cent stake, said it was in talks with competitor MonsterMob Group, that "may or may not lead to an offer for the company".
The news added 11 per cent to iTouch's share price in London to see it close up 3.75 pence sterling at 36.75p. That values the company at €218 million.
Both companies confirmed that talks were under way in separate statements sparked by ongoing media speculation about an alliance between the companies.
A number of British newspapers suggested this week that iTouch was about to launch a bid for its competitor, which is listed on London's Alternative Investment Market (AIM).
Those rumours drove MonsterMob's share price from £2.67 to over £3, but yesterday's statements sent the stock into retreat, forcing it down by 12 pence to £2.95.
Before confirming the talks, iTouch issued a separate statement indicating that it was the takeover target.
In the nine months to September 2004, iTouch had sales of €82 million, a 33 per cent increase on the previous year.
Operating earnings before write-offs were €8.44 million, compared with a €1.6 million loss at the end of the same period in 2003.
ITouch provides content like short messaging and internet for mobile phones. The company was founded in South Africa 10 years ago, before Independent News & Media took it over.
Independent floated it on the London Stock Exchange in mid-2000, raising over €160 million. At that time, the market valued iTouch at around twice last night's closing price.
MonsterMob Group operates in the same sector. Its shareholders include Barclay's Bank, which took a 7.5 per cent stake in the company for 88 pence a share in October through its TecCapital investment vehicle.
