Ad firm gets energy in swap deal

ONE MORE THING:THERE WAS an interesting announcement yesterday from low-profile Irish company Captive Audience Display Solutions plc (CAds), which is listed on the Plus market in London.

The company, led by executive chairman Liam McGrattan, announced a share-swap deal with Proventus Energy plc (PE), a British company also listed on Plus.

This will involve CAds acquiring a 3.916 per cent stake in PE and the UK company taking a 17.58 per cent share in the Irish business through the issue of 50 million new shares.

In a statement, McGrattan said the rationale was to allow both companies to “explore each other’s business model and to identify synergies and future revenue generating opportunities”.

This looks like code for a reverse takeover by PE of CAds.

For a start, there are few obvious synergies to be gained from an energy company and an outdoor advertising business taking shares in each other.

CAds is effectively a non-trading entity at present. Its outdoor ad business in Ireland – which involved TV screens on petrol forecourts – was credit crunched a couple of years back.

It was potentially a good idea but it launched just before the economy crashed and advertising opportunities evaporated.

But it does have two contracts in the Middle East that it is pursuing.

Separately, the company has three million shares in US Oil Gas and 500,000 in IMC Exploration Group, which listed recently.

PE has a 200 megawatt wind farm project in Bulgaria, that it hopes to start building next year.

In the meantime, it needs to raise about £60 million.

This is where a reverse takeover of CAds becomes interesting. McGrattan has experience of raising funds on the markets and its portfolio of other investments are potentially synergistic to PE.

A fundraising on the AIM market in London seems like a live prospect, possibly early in the new year. This might yet work out well for CAds and its shareholders here.