Scoot.com
Friday November 12, 1999
Scoot.com has wooed a partner to finance the roll-out across Europe of a consumer transaction service. That, at least, was the word in dealing rooms yesterday as frenzied trading in the stock - 23m shares changed hands - drove it up 20% to a high of 58.25p.
The online directory service has long made clear its ambition to move into markets such as Italy, Germany and France. Analysts say the most likely way Scoot can do this is by allowing a partner to take an equity stake, probably less than 10%, and finance the expansion in return for a share of the revenues it brings.
Who are Scoot's most likely partners? The incumbent and expansive Telecom Italia, Deutsche Telekom and France Telecom are candidates. So is Scoot's existing partner, Vodafone, but with Mannesmann in its sights it has bigger fish to fry. Lawrence Peterman, an analyst at Kyte Securities who has a 60p target price on the stock, suggests internet companies such as Amazon, eBay and QXL might get involved. 'They're all in the same business of connecting buyers with sellers. If a blue chip like Amazon buys in you could see the stock going to 70p.'
The other rumour doing the rounds was that a bid for Scoot is in the offing. That seems premature although proof of a successful European expansion might bring a takeover nearer.
At what price would an offer have to be pitched? Robert Bonnier, Scoot's ebullient chief executive, believes the market has chronically undervalued Scoot. He would probably ask for in excess of œ1 a share. Would he get it? Merrill Lynch believes the stock is worth 87p at present; Kyte Securities is more cautious.
But this is all frothy stuff. An alternative view might be that Scoot.com is desperate for cash to expand but still needs to prove its worth in terms of management and business model. There are a number of professional bear raiders looking to short this stock if the opportunity arises. For non-professional investors, this is a pure gamble. |
