Scoot, the internet directory firm, yesterday played down speculation that it is about to be bought by Vivendi but indicated that the French conglomerate was prepared to use its financial firepower to back future acquisitions.
The carefully worded statement to the stock exchange followed weekend talk of a £1.7bn Vivendi bid and a subsequent 63% surge in Scoot's share price yesterday morning.
The statement said that although talks between the two parties about a variety of ventures "may result in an increase in Vivendi's equity interest in Scoot, there has been no suggestion to date that Vivendi wishes to make an offer for the whole of the issued share capital of Scoot".
At the end of July Vivendi increased its shareholding in Scoot from 11.5% to 22.4% and analysts have speculated the French company will soon take over the Oxfordshire-based firm.
Although yesterday's statement dampened takeover talk, Scoot shares closed up 21% at 152p after it said it was "actively pursuing a wide range of opportunities that can further accelerate the roll-out of Scoot services across Europe". Opportunities include strategic alliances, acquisitions and "other trading arrangements".
Analysts interpreted the statement as Scoot saying that if it wants to take over any rivals it will be able to turn to Vivendi for financial support, rather than having to depend on stock markets which have recently been shaken by the technology stocks sell-off.
Vivendi backed Scoot's £178m acquisition of Loot, the classified advertising group, by subscribing for new shares at up to 250p each.
The apparent strengthening of the Vivendi relationship has prompted speculation that the French group might seek to merge its Comareg local newspaper group with Scoot and take its stake to 29.9%, the maximum allowed before it has to make a full bid.
"Vivendi sees Scoot as a way of leveraging its media assets in France," said Nick Bubb, internet analyst at SG Securities.
Scoot also appears to have a bright future in Vizzavi, the internet portal being developed by Vivendi and Vodafone. Scoot already has agreements with Vodafone.
Robert Bonnier, chief executive of Scoot, has faced criticism from the City following several re-inventions of its business model. However, people close to the company believe he has now cemented a solid relationship with Vivendi, which buys into his ethos of connecting buyers with sellers. Under his stewardship the shares climbed to 374p before the sell-off in technology stocks.
Last week it said that subscriber numbers were rising and it was likely to reach positive cash flow earlier than expected.
However, new versions of its service have not been without technical problems and a fall in revenues has been attributed to that. Operating losses for the first nine months of the year rose 56% to £16.6m as revenues fell 38% to £8.2m.
Mr Bonnier believes Scoot's full potential will only be realised when the next generation of mobile phones are introduced and it makes a series of location-based mobile internet products available.
Users visiting a city for the first time will be able to dial up for details of a local restaurant, book a table and then be directed to the venue using a route planner sent straight to mobile phones.
