Scoot gets Loot

Scoot: well-known business directory in the UK

Internet directory service Scoot has finalised a deal to buy classified advertising company Loot for £189.9m.

The agreement will combine both companies' advertising and media interests, which include business services, travel, entertainment and retailing.

Under the terms of the deal, Scoot will pay for the company in shares and cash partially funded by Scoot's partner, French communications and utility group Vivendi.

As a result, Vivendi will increase its stake in Scoot to 22% from 11.5%.

"The Loot deal is a good one," said Nick Bubb, analyst at SG Securities. "Loot has good sales and profits and other companies were looking at it," he said.

"The financial structure of the deal is also interesting, with Vivendi paying a premium to substantially finance it," he said.

European development

Vivendi has played a key role in Scoot's development, and the two have set up a joint venture to expand its presence throughout Europe.

The company offers internet wireless services in the Netherlands and Belgium.

The news came as Scoot announced pre-tax losses of £9.9m in the first half-year, compared with a loss of £11.1m in the same period last year.

But revenues were down to £6.2m from £9.4m.

The company hopes to have 60,000 subscribers by the end of this year, which it says will bring it close to break-even levels.

It says it needs between 75,000 and 80,000 subscribers to turn a profit.