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Penny Share Review 178

Monday 07 April 2003

News of the agreement of an out-of-court settlement of £125,000 involving Gamingking (GGK.L) and a former employee reaches us via The Times on Saturday. The settlement and also the legal fees incurred are, according to Friday's announcement, "likely to have a material adverse impact on the development plans of the Company." Gamingking also took the opportunity in the same statement to inform the market that trading was in line with expectations and that the anticipated benefits from the acquisition of a pull tab business acquired from Sportech were feeding through. The shares at 9.44 were unchanged from Friday's close at 0.45p.

Intelliplus (IPS.L) is featured in the 'Broker Buys' section of Saturday's Daily Mail. Hoodless Brennan is the broker in question and its recommendation to buy at 1.25p, based on the fact that it is not only "making significant progress", but is also "well placed to do deals." This appears to have stirred some interest, as the shares at 9.28 were ahead by 0.25p from Friday's close leaving them standing at 1.25p.

There are a couple of stories on Chris Evans, the chairman of Merlin Biosciences, the venture capital firm that has made a 10p cash offer to take ReNeuron (REN.L) private. According to The Sunday Times, the "stem-cell research firm will need regular infusions of cash for years" and that Evan's move "is partly an attempt to protect the value of Merlin's 52.7% stake." The logic behind this move becomes more apparent when we cast an eye over Merlin's portfolio and also its intentions. At present, Merlin is simultaneously attempting to buy Oxford Glycosciences for £110m, but also trying to raise funds to provide cash injections to the 20 biotech companies that are backed by Merlin (he also has an interest in Toad (TOA.L)). Therefore, as one investor, quoted in The Sunday Times, in relation to ReNEuron puts it, "Chris does not want to crystallise a write-off while he is out there raising money." The Sunday Telegraph provides a profile of Mr Evans, but also confirms, somewhat disappointedly that its readers who followed its advice to buy ReNeuron shares at 10.5p in November 2002, should accept the 10p cash offer. It does so while suggesting that long-term shareholders may "feel that the offer is a little bit mean." The shares were 9.375p at 9.28 unchanged from Friday's close.

Today's Announcements

The following companies, in which City Equities customers may have an interest, released announcements to the market this morning. These can be found by entering the relevant company name or ticker code in the search box on this site.

Glow Communications (GLW.L) - Final Results.
MV Sports (MVS.L) - Suspension.
Zi Medical (ZIM.L) - Further Re Agreement.

Look Out For This Week

7 Apr - UK industrial production (Feb), US consumer credit.
8 Apr - no data of interest.
9 Apr - UK Budget.
10 Apr - UK MPC meeting.
11 Apr - US retail sales, consumer sentiment.

Compiled by A McLintock

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