Acquisition

Yoomedia PLC
12 December 2003



            YooMedia to buy GoPlay TV from Sony Pictures Digital





YooMedia plc ('YooMedia' or the 'Company'), the interactive entertainment and
wireless group, has entered into an agreement to acquire GoPlay TV Limited ('
GoPlay'), an interactive-games channel currently operated by Sony Pictures
Digital Inc. ('Sony'), from Columbia Pictures Corporation Limited, a Sony
Pictures Entertainment Company, subject to shareholder consent. GoPlay owns and
operates an interactive games channel available on the first page of the
interactive main menu on Sky Digital. This transaction firmly establishes
YooMedia as the leading interactive content provider across all digital TV
platforms, covering games, chat, dating and gaming in the UK.



Acquisition highlights:



  • Acquisition to be paid for by 18 million new ordinary shares of 1p each in
    YooMedia PLC;
  • Sony initially to hold 10 per cent of YooMedia, such holding to be subject
    to a lock-in for 12 months from completion;
  • YooMedia receives a two-year exclusive license agreement for the UK ITV
    game rights for certain Sony Pictures Entertainment properties
  • Sony to appoint a representative to the board of YooMedia as a non
    executive director;
  • Acquisition values GoPlay at £6.4 million;
  • GoPlay Games channel on Sky to be renamed YooPlay;





YooMedia is to acquire GoPlay from Sony in return for the issue of 18 million
new ordinary shares of 1p each in YooMedia. The deal, subject to shareholder
approval, will see Sony become a major shareholder in YooMedia, with 10 per cent
of the enlarged share capital. Sony will also appoint a non executive director
to the YooMedia board.



GoPlay, launched by Sony Pictures Digital in July 2002, is a major games channel
on the Sky Digital Television platform, with a prominent position on the first
page of the electronic programme guide on Sky's interactive main menu. GoPlay
features Sony Pictures Entertainment games such as JEOPARDY! and Wheel of
Fortune.



Michael Sinclair, executive chairman of YooMedia, said: 'This is a transforming
deal for YooMedia. It gives us a prime piece of real estate on the biggest
digital platform in the UK in collaboration with one of the most powerful
entertainment and media groups in the world.'



He added: 'This progresses our strategy of rolling out our games products across
all digital platforms and underscores our market leadership in interactive
television content in the UK.'



Nizar Allibhoy, vice president of strategic alliances for Sony Pictures Digital,
said: 'A tremendous way for us to take the GoPlay TV business forward is to work
with a strong local partner like YooMedia, which has in-depth knowledge of
interactive content and digital television in the UK and powerful market
leadership in this arena. This relationship underscores our commitment to
interactive television, which we believe will be an increasingly important
distribution platform.'




About YooMedia:



YooMedia plc is a digital TV and wireless entertainment company that provides
services including chat, games, and dating and gambling products. YooMedia has:



•           signed an exclusive three-year partnership agreement with
Sportingbet Group, one of the world's leading online gambling business, which
will initially see YooMedia launching Sportingbet's popular games products on
all digital platforms in the UK in 2004.

•           the exclusive license for Tetris across UK digital cable and 
Freeview.

•           signed an exclusive partnership with Dateline to develop and launch
all of its interactive dating services on digital television.

•           invested in and launched the first ever games channel on Freeview
called Free2Play and has secured the right to run pay to play games on the
platform.

•           recently announced an agreement with ntl: Home to distribute all its
products on its digital interactive cable platform.

•           pioneered (and successfully trialled in partnership with Turner
Broadcasting) the use of mobile phones to interact in real time with a TV
programme. The Trigger TV technology is exclusive to YooMedia and protected by a
worldwide patent.

•           been selected by the government as the only dedicated interactive TV
company for the E-voting Framework.



YooMedia plc is quoted on the Alternative Investment Market.



www.yoomedia.com





About Sony Pictures Digital:



Sony Pictures Digital oversees CG animation, digital production and the online
content and assets of Sony Pictures Entertainment (SPE) and consists of four key
operating business units:  Sony Pictures Animation, Sony Pictures Imageworks,
Sony Online Entertainment and Sony Pictures Digital Networks, which is focused
on mobile entertainment, broadband video delivery and personal media software
and services.  By making information and entertainment available anywhere,
anytime on any enabled device, Sony Pictures Digital is exploring new technology
that links hardware with software in ways that advance the current boundaries of
the entertainment landscape.


For further information, please contact:

Michael Sinclair
Chairman and Chief Executive Officer                        020 7462 0870

Andrew Fearon
Chief Operating Officer                                     020 7462 0870

Grant Harrison/David Rae
Durlacher Limited                                           020 7459 3600


John Murray
Seahorse Associates Ltd                                     020 7553 6559
                                                            07831 314672







A circular will be sent to YooMedia's shareholders setting out the terms of the
Acquisition and giving notice of an Extraordinary General Meeting of the Company
(the 'Circular') to be held at Northumberland House, 155-157 Great Portland
Street, London W1W 6QP on 5 January 2004 at 10.00 a.m. An extract from the
Circular being sent to the Company's shareholders is included below.


Copies of the Circular will be available during normal business hours for one
month from the date of its issue, free of charge, from the Company's registered
office at Northumberland House, 155-157 Great Portland Street, London W1W 6QP.

Unless otherwise expressly defined, words and expressions defined in the
Circular shall bear the same respective meanings within this announcement.



An extract from the Circular is set out below:


'Dear Shareholder,



1.                       Introduction

Your Board is pleased to inform Shareholders that the Company has entered into
an agreement to acquire the whole of the issued share capital of GoPlay from
Columbia Pictures Corporation Limited, subject to shareholder consent. GoPlay
owns and operates an interactive games channel available on the first page of
the interactive main menu on Sky  The purpose of this letter is to provide you
with further information on the terms of the Acquisition and to seek Shareholder
approval for the issue and allotment of the Consideration Shares in accordance
with the Act.


2.                       Background to and reasons for the Acquisition

The Directors believe that the Acquisition of GoPlay represents a unique
opportunity to extend and secure the Group's position as one of the market
leaders in providing interactive television and wireless content and
technologies in the United Kingdom. The Acquisition secures a games channel on
BSkyB with a prominent position on the first page of Sky Digital's interactive
main menu. Sky is the most popular digital TV platform in the UK and combined
with the Group's existing games presence on ntl and Telewest cable systems as
well as on Freeview, the Group will have complete access to all 12 million-plus
digital homes in the UK.

In addition, the Acquisition will result in Sony Pictures Digital Inc., through
one of its affiliates , becoming a significant shareholder in the Company
following the issue and allotment of the Initial Consideration Shares.
Furthermore, following the Acquisition, a representative of Sony Pictures
Digital Inc. will be appointed to the board of YooMedia. Further information on
this appointment will be provided when appropriate.

The Company's expertise and experience in the interactive television market in
the United Kingdom - combined with GoPlay's prominent position on Sky Digital's
interactive main menu and Sony Pictures Digital Inc's access to quality content
- provides a strong base on which, in the opinion of the Directors, a
market-leading and profitable games channel can be built in the United Kingdom.

As a key element of the Acquisition, the Vendor on completion will inject £1.25
million working capital in to GoPlay. In the opinion of the Directors, this sum
when combined with the Group's YooPlay activity and existing resources will be
sufficient to fund the Group's games business to a break-even position.

In addition, the Vendor has agreed to a 12 month lock-up in respect of the
Consideration Shares, together with a further two year orderly market
arrangement. In addition on Admission the Company will enter into an exclusive
UK licence agreement with Sony Pictures Digital Inc. pursuant to which, for a
term of two years, the Company shall have the right to use certain Sony Pictures
Entertainment intellectual properties for interactive games developed by
YooMedia using any interactive television platforms in the UK, for which the
Company will pay a licence fee.

Your Board believes the Acquisition is an exciting development for the Group's
immediate and strategic future, as it provides a direct route to the largest
interactive platform in the UK for YooMedia's and Sony Pictures Entertainment's
interactive television products. Furthermore, the Board is pleased to have Sony
Pictures Digital Inc. as both a partner and a major shareholder in the Group and
look forward to developing this relationship and enhancing Shareholder value.



3.                       Information on GoPlay

GoPlay launched in July 2002 with two quiz games - JEOPARDY! and its flagship
game Wheel of Fortune.  The channel expanded in December 2002 with 3 versions of
its general knowledge game, The Joker's Wild, which offers movies, music and
sport quizzes.



Following a further expansion in March of this year, GoPlay now offers a
selection of 11 interactive rotating games. In addition to quiz games, the game
portfolio includes IO, Q*Bert and Poker.  Other games from the Sony Pictures
Entertainment library and third party content partners have been added to the
service since launch.



GoPlay's games experience consists of match play pricing levels ranging between
50p and £1 depending on the choice of game. This experience allows the player to
register with GoPlay, submit scores, enter competitions and win weekly and
monthly prizes.



GoPlay can be accessed by pressing the Interactive button on any Sky remote
control and selecting GoPlay from the menu.



The games are available to all 7 million households equipped with Sky Digital in
the UK.

Financial Information:



Pro-forma unaudited service revenues for the 12 months ending 30 September 2003
were approximately £1.25 million and the loss for the period was approximately
£2.3 million.  Attributable costs for this period were approximately £3.55
million of which approximately 45% will be ongoing.



The above numbers relating to GoPlay are derived from unaudited figures prepared
on a pro-forma basis by the Vendor. They have been adjusted retrospectively to
reflect current business conditions and activities and are not the subject of
warranties in the Acquisition Agreement.







4.                       Terms of the Acquisition

Under the terms of the Acquisition Agreement, the Company has agreed to acquire
the entire issued share capital of GoPlay from the Vendor for consideration
consisting of the issue of the Consideration Shares which are to be issued and
allotted at 35.3 pence per share (being the average closing middle market price
of an Ordinary Share as derived from the AIM Appendix to the London Stock
Exchange Daily Official List for the ten business days preceding the 12 December
2003, being the date of the announcement of the Acquisition ('the Issue Price'))
which values GoPlay at £6.4 million.

The consideration due from the Company to the Vendor pursuant to the Acquisition
Agreement is as follows:

(a)           the issue and allotment to the Vendor of the Initial Consideration
Shares at completion;

(b)           the issue and allotment to the Vendor of 1,350,000 of the Further
Consideration Shares on the six month anniversary of Admission; and

(c)           the issue and allotment to the Vendor of 4,050,000 of the Further
Consideration Shares on the twelve month anniversary of Admission.

In the Acquisition Agreement the Vendor agreed not to dispose of any of the
Initial Consideration Shares (save for in limited circumstances) for a period of
12 months from Admission and thereafter agreed to orderly market restrictions in
relation to any of the Consideration Shares for a total period of 2 years
thereafter.

The Acquisition Agreement contains business and trading warranties from the
Vendor to the Company and a separate tax indemnity given by the Vendor in
relation to tax liabilities of the Company arising or attributable to the period
prior to the date of the Agreement. The Acquisition Agreement also contains a
right to set-off an amount equal to any warranty claims against any of the
Further Consideration Shares to be issued and allotted in accordance with the
terms of the Acquisition Agreement.

The Acquisition Agreement is conditional on the passing of the Resolution at the
EGM and Admission.  It is expected that dealings in the Initial Consideration
Shares will commence on AIM on 6 January 2004.

In addition on Admission the Company will enter into an exclusive UK licence
agreement with Sony Pictures Digital Inc. pursuant to which, for a term of two
years, the Company shall have the right to use certain intellectual properties
owned by Sony Pictures Digital Inc. within interactive games developed by
YooMedia using any interactive television platform in the UK, for which the
Company will pay a licence fee during the second year of the licence.



5.                       The Consideration Shares

The Initial Consideration Shares will be issued, credited as fully paid, at the
Issue Price and will rank pari passu in all respects with the issued Ordinary
Shares, including the right to receive all dividends and other distributions
declared, made or paid after the date of their issue.  Application will be made
for permission to deal in the Initial Consideration Shares on AIM.  It is
expected that dealings will commence in the Initial Consideration Shares on 6
January 2004.

The Further Consideration Shares will also be issued, credited as fully paid and
will rank pari passu in all respects with the issued Ordinary Shares, including
the right to receive all dividends and other distributions declared, made or
paid after the date of their issue.  Application will be made at the appropriate
time for permission to deal in the Further Consideration Shares on AIM.

Following the issue of the Initial Consideration Shares, the Vendor will hold
10.1 per cent. of the enlarged issued ordinary share capital of the Company.
Following the issue of all of the Further Consideration Shares and assuming that
no further Ordinary Shares have been issued and allotted by the Company at that
time, the Vendor would then hold 13.8 per cent. of the enlarged issued ordinary
share capital of the Company.



6.                       Current Trading

The Group has recently concluded a number of important agreements, including an
exclusive three year agreement to take Sportingbet, the leading online gaming
and gambling group, on to interactive television. The Group also recently
successfully concluded a trial of its Trigger TV technology with the Cartoon
Network channel and is in discussions with other broadcasters about deploying
this technology, which allows for synchronous interactivity between a broadcast
stream and wireless devices.



Current revenues from chat and games products on cable platforms and Freeview
are in line with expectations. In September 2003, the Company announced an
agreement to take Dateline, Britain's leading offline dating agency, on to the
Sky Digital interactive platform. The Directors had anticipated that this
service would be launched during the final quarter of this year, however due to
technical issues relating to the volume of users anticipated by Sky to use
Dateline, activation of services have been delayed to early 2004.  Although the
volume of users expected by Sky is positive news for YooMedia in the longer
term, in the short term, due to the technical difficulties, there will be no
revenues from YooMedia's Dateline product in the 2003 financial year.
Consequently YooMedia's 2003 revenues will be less than management expectations,
however the directors do not believe that this will have a significant impact on
the Company's 2003 net result.

On 18 November 2003 the Company also announced that, having exercised its right
of conversion, it had called for conversion of the whole of the Loan Stock into
Ordinary Shares. This resulted in the issue and allotment to the Stockholders of
20,000,000 new Ordinary Shares at an issue price of 10 pence per share, credited
as fully paid.



7.                       Requirement for Shareholder Approval

As the Acquisition will involve the issue of the Consideration Shares it is
necessary for the Directors to seek the authority of the Shareholders to allot
these shares.  Accordingly, the Directors have convened the Extraordinary
General Meeting at which Shareholders will consider and if thought fit pass an
ordinary resolution to authorise the Directors to issue and allot the
Consideration Shares.



8.                       Irrevocable undertakings

The Company has received an irrevocable undertaking to vote in favour of the
Resolution from Foresight Technology VCT Plc, which has a beneficial interest in
respect of 18,410,000 Ordinary Shares representing approximately 16.3 per cent.
of the current issued share capital of the Company.

The Company has received an irrevocable undertaking to vote in favour of the
Resolution from Artemis Investment Management Limited, which has an interest in
respect of 5,822,451 Ordinary Shares representing approximately 5.2 per cent. of
the current issued share capital of the Company.

Myself, Leo Noe, Lord Evans, Andrew Fearon, David Docherty, Edmund Abrams,
Bernard Fairman and Richard Blake have also undertaken to vote in favour of the
Resolution in respect of our aggregate holdings of 37,155,762 Ordinary Shares
representing approximately 33.0 per cent. of the current issued share capital of
the Company.

In aggregate irrevocable undertakings to vote in favour of the Resolution
received by the Company in respect of 61,388,213 Ordinary Shares representing
approximately 54.5 per cent. of the current issued share capital of the Company.



9.                     The Extraordinary General Meeting

Set out at the end of this document is a notice convening the Extraordinary
General Meeting of the Company to be held at Northumberland House, 155-157 Great
Portland Street, London W1W 6QP on 5 January 2004 at 10.00 a.m.  At this meeting
an ordinary resolution will be proposed to grant the Directors authority to
allot the Consideration Shares pursuant to Section 80 of the Act.



10.                    Action to be taken by Shareholders

Shareholders will find enclosed with this document a Form of Proxy for use at
the Extraordinary General Meeting.  The Form of Proxy should be completed and
returned in accordance with the instructions printed thereon so as to arrive at
the Company's Registrars, Capita Registrars, The Registry, 34 Beckenham Road,
Beckenham, Kent BR3 4TU as soon as possible and in any event not later than
10.00 a.m. on 3 January 2004.  Completion and return of a Form of Proxy will not
prevent Shareholders from attending and voting in person at the Extraordinary
General Meeting should they so wish.



11.                    Recommendation

The Directors believe that the Proposals are in the best interests of the
Company and its Shareholders and recommend you to vote in favour of the
Resolution as we intend to do in respect of our beneficial shareholdings of
37,155,762 Ordinary Shares, representing approximately 33.0 per cent. of the
issued ordinary share capital of the Company.

Yours faithfully




Dr Michael Sinclair

Executive Chairman'






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