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7digital plotting UBC takeover that will make it publicly listed

By | Published on Monday 25 November 2013


Digital music provider 7digital is close to merging with radio industry content maker and service provider UBC Media Group, in a reverse takeover that will basically give the MP3 seller a listing on the London Stock Exchange, according to the Daily Telegraph.

7digital confirmed this morning that it had just taken investment from UBC, and that further talks are now ongoing regards a possible reverse takeover. If it goes ahead, that would basically see 7digital acquire UBC, but then – and this is where the reversing occurs – the combined company would take UBC’s place on London’s Alternative Investment Market, meaning it would be publicly listed.

Although originally created as an independent programme maker for the UK radio sector, for a time the Unique Broadcasting Company operated its own stations, and was involved in an ultimately abandoned project that planned to sell MP3s to radio listeners utilising the DAB digital radio network.

More recently the firm has focused again on making content for and providing services to other radio companies, while pursuing ambitions in the interactive space, not least by taking a healthy slice of online and mobile audio-sharing service Audioboo. That latter deal saw UBC buy Imagination Technologies out of the tech start-up, but in an arrangement that gave Imagination equity in UBC itself. Imagination is also an investor in 7digital, and has seemingly been a driver in negotiating the 7digital/UBC alliance.

7digital, of course, operates its own download store, but is perhaps better known for powering the digital offerings of a range of other firms, mainly tech and mobile giants, though it is also the platform behind the recently launched all-new HMV download store.

Prior to its administration at the start of the year, the old HMV Group was a sizable shareholder in 7digital. It’s not entirely clear who now owns what stakes in the firm, though if and when it becomes publicly listed all that will be revealed. It will also be an opportunity for 7digital’s early investors to cash-in, assuming enough hype can be built around the combined 7digital/UBC.

Although specifics of the arrangement are not yet known, it is thought that UBC co-founder Simon Cole would be Executive Chairman of any combined company, while 7digital co-founder and boss man Ben Drury would be the new firm’s CEO. Meanwhile both men have issued statements about UBC taking a stake in 7digital.

Drury: “Our platform and partnership roster has been growing steadily over time and we see continued interest in music globally, across online radio, subscription streaming, and downloads. We will continue to develop and scale the platform, and to innovate with new products and features. Radio, in particular, is an area where we see a lot of future opportunities, and we are thrilled that our new strategic investor and partner, UBC, shares this vision”.

Cole: “I’m very happy that we are able to help 7digital’s impressive expansion and that we have agreed to try and make our two companies one. The union of content and technology skills created by the potential merger of UBC and 7digital, would create a company with genuine global scale. The combined strengths give access to both the customers and content needed to drive business in the digital age”.