Gulf starts at Sheikh Adi-2 25/05/2012
Iraq-focused oil explorer Gulf Keystone Petroleum (GKP) has begun drilling at the Sheikh Adi-2 well in the Sheikh Adi block.
Blinkx to acquire Burst in $30m deal
Video search engine Blinkx (BLNX) has announced that it is acquiring American advertising and technology concern Burst Media (BRST) in a deal worth $30 million (£18.5 million).
Blinkx declared that it has entered into the agreement to purchase Burst via both the issue of new Blinkx shares and cash with Blinkx enthusing that 'the combination of the two companies will bring Blinkx's 35 million hours of online video and TV to Burst's audience of over 130 million unique users' adding that Blinkx will 'create contextually relevant video channels for Burst's network of publishers.'
Remarking that 'Blinkx believes that Burst customers will benefit from working with the internet's leading video search engine with greater financial resources, technology leadership and additional customer-facing strengths in sales and support' the company adds that the 'majority of Burst's senior management team will continue with the combined group.'
The Cambridge-educated CEO of Blinkx, Suranga Chandratillake opined that the group was 'extremely excited about the acquisition' as it will allow the company to overcome the challenge of 'online video's inability to match the sheer scale of audience that television can deliver' adding that the concern 'will have the potential to create personalised, online television that is watched by hundreds of millions of users.'
Meanwhile Jarvis Coffin, the chief executive of Burst remarked that 'Burst stockholders are receiving a substantial premium for their Burst shares.' Burst today declared results for the year to December in which it reported an 11 per cent increase in gross profits to $15.5 million on turnover of $37.7 million.
Blink also issued a trading update today in which it declared that it was expecting full year revenues for the year to March of $65 million, ahead of analyst expectations, also reporting a cash position of $52.8 million and noting that the cash consideration for the Burst acquisition should not cost more than $4.5 million.
Analysts at Canaccord noted that both the target price and forecasts would be put under review following the better than expected results suggested in the update. The broker was forecasting pre-tax profits of $6.5 million (2010: loss of $8.9 million) on turnover up 78 per cent to $60 million on results for the year to March 2011. Canaccord reiterated its buy rating.
Shares in Blinkx were recommended last May by Growth Company Investor at 27p and have since gained more than 400 per cent, up 2.25p today to 113p.
Meanwhile Burst, which is receiving an offer of 25p a share from Blinkx, has seen its shares rocket by 375 per cent this morning from five pence to a current price of 23.75p, with the offer looking an excellent deal for shareholders.
We reiterate our buy rating for Blinkx while recommending that Burst shareholders accept what looks like a good price.
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