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SCIENCE & TECHNOLOGY
The Canadian Press - ONLINE EDITION
Intertainment weighs offer to help launch Ortsbo as separate company
By: The Canadian Press
Posted: 02/8/2011 12:02 PM | Comments: 0 | Last Modified: 02/8/2011 12:52 PM
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TORONTO - Intertainment Media Inc. (TSXV:INT) says it's considering spinning off its language translation software, Ortsbo, as a separate U.S.-listed company.
Ortsbo.com provides real-time translation options in more than 50 languages and is currently designed for use on popular social networking sites such as Facebook and Twitter.
The Toronto-area company said Tuesday that private U.S. investment firm Lion Gate Capital Inc. has offered to facilitate Ortsbo's listing on the New York Stock Exchange.
That would be quite a leap for Intertainment, which currently lists its shares on the TSX Venture Exchange — an affiliate of the Toronto Stock Exchange that's intended for smaller companies.
Intertainment shares have recently risen dramatically on heavy volumes at the Venture Exchange, which has lower listing requirements and fees than the main U.S. or Canadian markets..
Under the terms of Lion Gate's offer, Intertainment would retain a "significant" ownership stake in Ortsbo after listing the company on the New York Stock Exchange. The company would then consider allowing its shareholders to hold some equity in the new Ortsbo.
Intertainment is reviewing the offer with guidance from the Corum Group, which had previously been hired to help the company assess its future options, it said.
Ortsbo.com has been credited as the key driver behind Intertainment's recently skyrocketing stock prices, prompting speculation that the company could become a takeover target.
There's also potential for any fast-rising stock, particularly technology companies, to fall dramatically if investors are disappointed by their performance or if they are unable to deliver on the vision that excited interest in the first place.
Intertainment chief executive David Lucatch previously revealed it had received a $30 million offer for the division last September, adding Ortsbo is currently valued higher on the market.
Early afternoon trading on the Toronto Stock Exchange saw the company's shares valued at 83 cents a piece, up 15 per cent from Monday's close and more than seven times higher than the 11 cents a share recorded in late January.