E-xentric share placing raises £40m for Net buys

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The Independent Online

E-xentric, the former clothing retailer turned Net investment fund, said yesterday it had raised £40m through a private share placing and secured an option to acquire MCA Holdings, a web management and media solutions company, for £9.8m.

The former Blakes Clothing company placed 8 million shares with institutions, priced at 50p each. Under the terms of the MCA agreement - its first potential acquisition - E-xentric has a year-long option to buy the company by paying £1.3m cash and issuing 17 million new ordinary shares. Dependent on performance targets in the 12 months following the acquisition, E-xentric may also make an additional payment of a maximum of three million shares.

Edward Spencer-Churchill, the son of the Duke of Marlborough and one of E-xentric's directors, said: "We think the internet is a revolution and it's here to stay." He said that by focusing on the e-services market - offering internet advice to both start-ups and blue-chip companies - the group would be "selling the pitches and shovels for the gold rush, rather than participating in it".

As at 31 December 1998, MCA had net assets of £260,261. In the 12 months to that date, the group made an operating loss of £205,763. Under the rules of the alternative investment market, where E-xentric is listed, the acquisition of MCA would constitute a reverse takeover. Shares in the investment fund, which were frozen at 67p on 13 March, will therefore remain suspended until the deal is approved by shareholders. The group is currently valued at £37m.

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