Network Seven is to buy $26 million worth of Engin shares in a move that will see the company take a 33 percent stake in the VoIP provider.
The deal will see Seven acquire 119 million fully paid ordinary shares at a price of $0.22 a piece. So far, Seven has already purchased 10 million shares with the sale of the balance of 109 million subject to shareholder approval.
Shareholders will also be asked to approve the appointment of Seven’s Ryan Stokes, Bruce McWilliam and Rohan Lund and Engin’s CEO Ilkka Tales as directors on the Engin board.
Engin's Tales said the deal followed several months of negotiations with a number of different parties.
The deal with Seven in part coincided with related wholesale negotiations with Yahoo!7 on the development of a Yahoo!7/Engin portal, he said.
Tales said the deal presented both Seven and Engin the form the gateway for the delivery of broadband, VoIP and content services into the digital home.
“Mobility will also be key in this [deal] and we are in discussions with partners and manufactures on this,” he said.
“The Yahoo!7 IM [instant messaging] platform is today PC to PC based but the next level is taking that to PC to phone and other mobile devices.”
Tales would not be drawn on whether the $26 million in funding would in part be used for future acquisitions, but said the company would be investing in advertising and the development of content services for consumers.
He said would also not say whether the appointment of Stokes, Lund and McWilliam was a condition of Seven's investment in Engin, but added that their presence would a significant degree of experience to the business.
Thales said that for the time being, Engin would opt to continue its focus on the Australian market over any foreign expansion.
As at 10.45am this morning Engin shares were trading at $0.345 down from a an opening of $0.370 and a high of $0.375.
Seven invests $26m in Engin
By Tim Lohman on Sep 15, 2006 11:03AM