February 14 2010 – The Sunday Times
The Reuben brothers, the billionaire property investors, are plotting a takeover bid for a company involved in supplying television footage from racecourses to bookmakers.
Catalyst Media Group, which is listed on AIM with a valuation of £26m, appointed bankers at Rothschild this month to advise on the group’s future.
David and Simon Reuben control Northern Racing, owner of 10 racecourses, including Chepstow and Uttoxeter.
City sources said the brothers, who are estimated to be worth more than £2.5 billion, had not made a firm decision on an offer for Catalyst but had expressed preliminary interest.
Catalyst’s main asset is a near-21% stake in Satellite Information Services, whose cameras capture horseracing as well as news and sports events for ITV and Sky, including rugby and motor racing. Other shareholders in SIS include Ladbrokes, William Hill and the Tote. Northern Racing is one of its customers.
Catalyst’s shares rose 6.25% on Friday to 93½. Before the strategic review with Rothschild was announced, they were at 69½.
The review was widely interpreted as a signal that the business was available for sale. Catalyst did not believe that its market value accurately reflected the value of the SIS stake, which could be worth more than £30m.
SIS generated revenues of £193m for the year to March 2009 and earnings before interest, tax, depreciation and amortisation of £35.6m. Based on a valuation of six times earnings, the 20% stake would be worth £43m.
Catalyst bought its stake in SIS for £23m from United Business Media in 2005. The company’s roots lie in Newsplayer, a digital archive set up by Sir David Frost, the veteran broadcaster.