Internet investment vehicle Oxygen Holdings is planning a merger with Tera, a Finnish internet group it invested in last year, the Financial Times reports.
Oxygen has not commented on reports. The group’s negotiations to buy its rivals Netvest.com plc ended yesterday. Netvest was believed to be concerned about taking Oxygen’s shares at their current valuation.
Reports suggest that Oxygen has about £2m of cash on its balance sheet and plans to press on with a merger with Tera, which has experience in the area of wireless internet applications.
Oxygen was launched in February last year and reached a value of £211m on its first day although it had net assets of only £2.2m. Upon yesterday’s Netvest news, the shares fell 9 per cent to 2.1p valuing it at about £8.7m . The share price stands at 2p today.
A deal with Tera would involve Oxygen, which owns 15 per cent of the Finnish company, helping to invest two funds which have been raised by Tera. It would cease to invest further itself but instead generate income from management fees.