iTouch in takeover talks with Monstermob

Monstermob Group, the mobile phone content provider part-owned by the Barclay twins, is in talks to acquire its rival, iTouch.

Itouch, which is 34.8 per cent owned by Independent News & Media, the publisher of The Independent, said it is examining a number of strategic options and is in preliminary discussions which may lead to an offer.

There has already been a large amount of consolidation in the mobile phone content market with a number of Japanese and American companies aggressively buying rivals.

Shares in Monstermob rose sharply on Thursday, prompting a stock exchange announcement yesterday while iTouch shares were up more than 11 per cent per cent as a result of its statement.

Both companies supply ringtones, pictures, games and screensavers for mobile phones and are experiencing strong growth as demand for their content soars on take-up of more advanced mobile phones.

Combining the two companies would result in an enlarged group with revenues of more than £75m and a market value of more than £230m.

Any iTouch deal would be the latest in a series of transactions in the market which has seen companies such as VeriSign take aggressive positions. Tom.Online and Infospace have also been active in the consolidation process.

In its statement iTouch said: "Over the last year, we have established iTouch as a leading European provider of mobile content with the widest footprint in terms of coverage or international territories in the region. This is a result of strong organic growth and the successful integration of two major acquisitions."

In November iTouch announced strong third-quarter results which showed that earnings before interest, tax, depreciation and amortisation were £2.5m giving a total of £5.8m for the year to date. Sales grew 37 per cent in the third quarter to £22.3m and 33 per cent for the first nine months to £56.1m. It reported a strong performance in Europe and the addition of new markets for its content products such as South Africa and Australia.