Ring tone's company shareholders stick by Zed offer

Ringtones specialist Monstermob said today its shareholders had voted in favour of a £34m (€51m) takeover by Spanish group LaNetro Zed, despite the promise of a higher rival offer from Chinese firm Linktone.

Monstermob shareholders backed the 50p-a-share deal to sell a 53% stake in the business today at an extraordinary general meeting, leaving Linktone out in the cold.

Linktone, which had announced an intention to offer 65p-a-share for a full takeover of the group if shareholders voted against Zed’s bid, ruled out making a formal approach after the news today.

Linktone chairman Elaine LaRoche said: “Monstermob shareholders have spoken and Linktone respects that.”

The offer from the Chinese mobile phone services group would have valued Monstermob at £43.8m (€65.3m), rivalling Zed’s deal to pay £34m (€51m) 68 million newly invested shares.

However, the Monstermob board urged shareholders earlier this week to stick by the Zed offer without a firm offer on the table from Linktone, saying the Spanish deal “provides a solution to Monstermob’s funding needs”.

LaNetro Zed needed a 75% majority to succeed with its offer, which is being put forward as a “strategic investment” rather than a full takeover approach.

More than 80% of Monstermob shareholders voted for the Zed tie-up today.

The board of Lancashire-based Monstermob agreed to Zed taking a 53% stake in December.

Linktone, which is listed on Nasdaq in the United States, is not believed to have been given access to Monstermob’s books.

Monstermob shares were down 13% at 48p after the news.

The group’s shares have fallen dramatically over the past 18 months from just under 460p in September 2005.

Shares lost 60p in one day last summer after mobile phone company regulations in China were changed.

China had been Monstermob’s most profitable region and the group had acquired a number of local operators to cement its position, but the group admitted there was “considerable uncertainty” over the future of its Chinese operations after the July rule changes.

It has since significantly cut its Chinese workforce and has been in discussions with a number of parties over a possible sale.

Spanish counterpart Zed also has a presence in China, having grown its business to span 16 countries worldwide since launch in 1996.