29 Sep 2008 11:16
Milestone Group PLC
"Milestone" or the "Company"
NEW SPORTS VENTURE SHAREHOLDERS AGREEMENT
The Company announces its wholly-owned subsidiary, Milestone Media Limited, has entered into an agreement to launch a new company, Nexstar League Limited ("Nexstar"), with Enrich Social Productions Limited ("ESP").
Nexstar intends to launch sports entertainment businesses in the UK supported by an associated rich media internet platform. It is intended to initially launch a UK-wide sports championship targeting under-18s in 2009.
Under the terms of the agreement with ESP, Nexstar will operate as a subsidiary of Milestone with the Company holding a 51 per cent beneficial controlling interest in the new venture. The remaining 49 per cent will be held by ESP, a new Irish based company currently developing a number of web-based entertainment formats.
Milestone has an option to increase its beneficial stake in Nexstar to 75 per cent (the "Option"). Under the terms of the Option, if exercised before 31 October 2008, the Company may increase its interest in Nexstar to 75 per cent by paying ESP a lump sum of £80,000 and a deferred consideration based on a formula relating to Nexstar's earnings in the 12 months ending 28 February 2011. The total deferred consideration payable under the terms of the Option is capped at £500,000.
Milestone Chairman, John Sanderson, said:
"Milestone is excited to have formed this new venture with ESP which we believe will help take grassroots sports in the UK to the next level."
The Nexstar business plan is in the process of finalisation. It has been agreed in principle that 10 per cent of the pre-tax profits of Nexstar will be donated to children's causes. Completion of the shareholders agreement with ESP is conditional upon Milestone procuring the funds necessary for Nexstar to pay for the licensing of ESP's technology. Completion is also conditional upon approval of Nexstar's structure from all necessary regulatory authorities and ESP agreeing the final specification and terms for its technology with Nexstar.
The Milestone Board is currently exploring a number of options to meet the working capital requirements for the Company and Nexstar and intends to make further announcements in due course.
FOR FURTHER INFORMATION
Milestone
John Sanderson, Chairman 020 7580 2444
Arden Partners plc
Richard Day / Adrian Trimmings 020 7398 1632