Option Agreement with Filmmaster Television S.r.L

15 Dec 2009 07:00



15 December 2009

Brainspark plc

("Brainspark or the "Company")

Option agreement with Filmmaster Television S.r.L

The Board of Brainspark (AIM: BSP) is pleased to announce that it has entered into an option agreement with Mr Giuliano Borsari for a consideration of £1 (one pound) to acquire 10 per cent. of the issued share capital of Filmmaster Television S.r.L ("Filmmaster Television"). 

Filmmaster Television (www.filmmastertv.com), headquartered in Milan, was founded in early 2006 following the merger of Clip Television and FilmMaster Film. The company produces music and lifestyle programmes, original formats and television fictions. It is part of the Filmmaster Group, which is a leading Italian media company, specialising in TV commercials and production services, web and digital solutions, events and television.

The current shareholders of Filmmaster Television are Filmmaster Group S.p.A (40%), Cinecittà Entertainment S.p.A (25%), Certatim srl (25%) and Giuliano Borsari (10%).

Cinecittà Entertainment S.p.A. is the company founded by Cinecittà Studios with the aim of developing the route for variety and diversification at Rome's historic film studios on Via Tuscolana. In Italy, it is seen as the centre of film making and is known as the "Italian Hollywood". It has grown from a general services company to a fully integrated entertainment and multimedia company able to capitalise on the following valuable assets: the Cinecittà brand and Collective Cinema, the know-how, the craftsmanship and the excellent industrial services present at Cinecittà Studios.Cinecittà Entertainment S.p.A. develops & promotes the following business areas: 1) Theme Parks, 2) Television Productions, 3) Services: Licensing, Merchandise, and Management and 4) Entertainment.

For the year ended 31 December 2008 Filmmaster Television generated revenue of €7,285,300 (£6,642,414) and a loss before tax of €485,159 (£442,346).

Under the terms of the option agreement entered into on 24 November 2009 Brainspark has made available €120,000 (£109,411) to Mr Giuliano Borsari in order that he is able to contribute pro rata to the capital raising of Filmmaster Television which closed on 24 November 2009. 

The above funds are being made available as an interest free loan which is secured by Mr Giuliano  Borsari's shareholding in Filmmaster Television. Should the option not be exercised by Brainspark the loan shall, at Brainspark's sole discretion,  become immediately repayable on expiry of the option agreement, this being 23 December 2009. The exercise of the option is at the sole discretion of Brainspark and the option is exercisable at any time between 10 December 2009 and 23 December 2009.

The proposed investment in Filmmaster Television by Brainspark will be satisfied through the Company raising additional funds through a proposed placing of new ordinary shares in Brainspark.

Should the option be exercised by Brainspark the consideration payable to Mr Giuliano Borsari will be €150,000 (£136,763) in cash and the issue of 104,000,000 new ordinary shares in Brainspark shares (the "Consideration Shares"). In the event the option is exercised by Brainspark the loan of €120,000 (£109,411) provided to Mr Giuliano Borsari by Brainspark will not be repaid and the Company shall make a further cash payment of €30,000 to satisfy the cash consideration. The Consideration Shares (which would represent 31.4% of the current issued share capital of Brainspark) would be subject to a 12 month lock-in arrangement. As announced on 19 November 2009, the City Code on Takeovers and Mergers is not deemed to apply to the Company.

The exercise of the option by Brainspark will be dependent on, inter alia, completion of satisfactory due diligence into Filmmaster by the Board of Brainspark. 

The Board of Brainspark will make further announcements as appropriate.

Prof. Francesco Gardin, Chairman of Brainspark, commented: "Filmmaster, our second proposed investment in recent weeks, would take us into the high growth industry of Italian television. The company has satisfied our investment criteria due to its multi-directional strategy which gives us access to traditional media as well as the rapidly expanding services of new media. We view the potential synergies between Filmmaster and the Mediapolis Theme Park as a unique opportunity for both companies and ultimately for Brainspark as an investor."

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