TV auction group fetches £194m in takeover

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The Independent Online

Sit-up, the television shopping group, was sold yesterday in a deal that values it at £194m - making its three founders multimillionaires.

The company has been acquired by Telewest, the cable business which is heading towards a merger with its rival NTL.

Sit-up was formed in 1999 by two former Ondigital executives, Ashley Faull and John Egan, who left the broadcaster before it was renamed ITV Digital. They were joined by Chris Manson, who used to run the media activities of Chelsea Village.

According to the most recent Companies House records, Sit-up had 10.2 million shares in issue, including 2 million redeemable convertible cumulative preference shares, implying a basic value per share of £19. At that price the stakes of Mr Faull and Mr Egan disclosed on the company's share register would be valued at £11m each and Mr Manson's stake would be worth £5.5m

Three other stakes of exactly the same size also appear on the shareholder list. These are held by three different nominee companies, all registered at the same office in St Helier, Jersey.

A number of Sit-up staff will also enjoy significant windfalls, as will venture capital funds which invested in the company including Evolution Capital and Chrysalis VCT.

Telewest will add Sit-up to its television content businesses that include Flextech and a 50 per cent share in UKTV, jointly owned with BBC Worldwide. A merger with NTL is likely to lead to an eventual sale of Telewest's content business.

Sit-up has become one of the country's fastest-growing home shopping businesses and rivals QVC for market leadership. Sit-up's two main channels are Bid TV and Price-Drop TV, which are auction channels, although the latter runs auctions in reverse where punters bid to buy goods once they have dropped to a certain price.

In its first year of business, in 1999, Sit-up generated £2m in turnover. Last year it had turnover of £206m, up from £119m in 2003, and generated £21m of free cash compared with £9m the year before. Its accounts record profits before tax of £11m in 2004 compared with a loss of £1m in 2003. Its channels air on Freeview, Sky and Telewest reaching 16 million homes.