GON Galleon Hldgs

RNS Number:1636G
Galleon Holdings PLC
23 October 2007


               Galleon Holdings plc (the "Company" or "Galleon")

    Acquisition of Phoenix Investment Global Limited, Placing of Shares and
                      Confirmation of Total Voting Rights

                                23 October 2007


Galleon Holdings plc, the AIM-listed intellectual property owner and developer
in the entertainment sector, is pleased to announce that it has agreed to
acquire the entire issued share capital of Phoenix Investment Global Limited
("Phoenix"), a Hong Kong based media solutions company, for initial
consideration of #1.5 million (the "Acquisition"). In addition, deferred
consideration of up to #500,000 will become payable subject to, inter alia, two
of Phoenix's broadcast customers in South East Asia entering into exclusive
arrangements on certain mobile phone services. Finally, additional consideration
of up to #3.5 million may become payable, subject to Phoenix's financial
performance over the next three years. The entire consideration is to be
satisfied by the issue of ordinary shares of 1p each in Galleon ("Ordinary
Shares").

Phoenix specialises in the provision of interactive broadcast television
services which allow broadcasters in China and South East Asia to provide
interactive entertainment that their audiences can access through TV, online and
mobile. Its customers are leading broadcasters such as Hunan ETV, Hunan
Satellite, Guangdong Sports Channel (China) and Media Prima (Malaysia). Phoenix
is a company registered in the British Virgin Islands, with headquarters in Hong
Kong and also has offices in China and Malaysia. Phoenix was established in July
2007 by a team of experienced media executives who are at the forefront of
providing entertainment through mobile and interactive media in Asia. Phoenix
has yet to complete its first six months' trading and its net assets are not
currently material.

The Acquisition forms part of Galleon's ongoing expansion programme, providing
the Company with a strengthened presence in China. It also provides the Company
with a platform from which it can source new business opportunities. Together
Galleon and Phoenix intend to exploit their broadcaster relationships across
South East Asia, to increase the provision of interactive services and to roll
out new entertainment properties.

The initial consideration of #1.5 million will be satisfied by the issue of
4,863,814 new Ordinary Shares (the "Initial Consideration Shares") and
completion of the Acquisition is conditional, inter alia, upon the admission of
the Initial Consideration Shares to trading on AIM which is expected to occur on
Friday 26 October 2007.

The deferred consideration of up to #500,000 (if payable) will be satisfied by
the issue of up to 1,621,272 new Ordinary Shares. The actual amount of this
deferred consideration and when it becomes payable will depend on the period
which has elapsed between completion of the Acquisition and the exclusive
arrangements referred to above being entered into with two of Phoenix's South
East Asian customers.

#250,000 of additional consideration will be payable for each of the next three
years provided Phoenix's group achieves specified annual targets, with up to a
further #2.75 million of additional consideration becoming payable if Phoenix's
group achieves the aforementioned targets and achieves earnings before interest
and tax of #6.7 million over the three years. The additional consideration (up
to #3.5 million in total) will also be satisfied by the issue of new Ordinary
Shares. The vendors of Phoenix will not be permitted to sell, save in particular
limited circumstances, any of the Ordinary Shares issued to them as
consideration for the Acquisition before the third anniversary of completion of
the Acquisition.

Commenting on the acquisition, Stephen Green, Chief Executive of Galleon, said:
"Our strategy for cross-platform media entertainment has been to focus on the
emerging markets, with their huge audiences and high mobile phone penetration.
With Phoenix, Galleon has a pipeline straight into China and Asia giving our
cross-platform entertainment content access to hundreds of millions of viewers
at any one time. The sheer size of the audiences in China alone creates whole
new scale-based business models, and the Phoenix team has the experience,
network and relationships to maximise these opportunities going forward."

Galleon today further announces that it has conditionally raised funds for the
Company of #8 million (before expenses) via a placing (the "Placing") of
27,586,212 new Ordinary Shares (the "Placing Shares") at a price of 29p per
share. The Placing Shares have been placed with institutional and other
investors. The Placing is conditional on completion of the Acquisition and the
admission of the Placing Shares to trading on AIM which is expected to occur on
Friday 26 October 2007.

The majority of the proceeds of the Placing will be used to fund the future
development of the enlarged group's interests in China, which may include
further acquisitions, such as the possible acquisition of a Chinese mobile
services provider, with which Galleon is already in discussions, or the
establishment of joint ventures. The remainder of the proceeds of the Placing
will be used to provide additional funding for Galleon's Product IP division,
Croco, to fund the further development of the Company's Entertainment
properties, and to cover the Company's acquisition expenses.

The Placing is being made on a non-pre-emptive basis as the time and costs
associated with a pre-emptive offer are considered by the board of Galleon to be
excessive and not in the interests of the Company at this time.

Imagination Holdings Limited, which currently holds approximately 22.43% of the
Company's issued share capital, is subscribing for 6,806,897 Placing Shares as
part of the Placing although such amount may be scaled back at the sole
discretion of Smith & Williamson Corporate Finance Limited ("S&W"). This
subscription represents a related party transaction under the AIM Rules. With
the exception of David Wong and Pritesh Desai, who are directors of Imagination
Holdings Limited, the Directors of the Company consider, having consulted with
its nominated adviser, S&W, that the terms of this subscription are fair and
reasonable insofar as its shareholders are concerned.

Cheyne Capital Management (UK) LLP, which, via Cheyne Global Emerging Markets
Fund L. P., currently holds approximately 11.02% of the Company's issued share
capital, is subscribing for 3,448,276 Placing Shares as part of the Placing.
This subscription represents a related party transaction under the AIM Rules.
The Directors of the Company consider, having consulted with S&W, that the terms
of this subscription are fair and reasonable insofar as its shareholders are
concerned.

Application has been made to the London Stock Exchange for the Initial
Consideration Shares and the Placing Shares to be admitted to trading on AIM.
Admission of these shares is expected to become effective, and trading in them
is expected to commence, at 08.00 a.m. on 26 October 2007 ("Admission").

Total Voting Rights

Following the Acquisition and the Placing the Company's issued share capital
will consist of 97,273,985 ordinary shares with a nominal value of 1p per share,
with voting rights (one vote per ordinary share). The Company does not hold any
ordinary shares in treasury.

Therefore, on Admission, the total number of ordinary shares in the Company with
voting rights will be 97,273,985. With effect from Admission, the figure of
97,273,985 ordinary shares may be used by shareholders as the denominator for
the calculations by which they will determine if they are required to notify
their interest in, or a change to their interest in, the Company under the
Financial Services Authority's Disclosure and Transparency Rules.

Interests of Directors following the Acquisition and Placing

The Directors' interests in the Company following the Acquisition and the
Placing will be as follows:

Director               Number of Shares    Percentage of Enlarged Share Capital

Stephen Green             550,000                        0.57%
Leonard Dunne             550,000                        0.57%
Pritesh Desai             60,000                         0.06%


David Wong and Pritesh Desai are directors of Imagination Holdings Limited
which, on Admission (assuming its subscription is not scaled back by S&W), will
hold 21,349,306 shares in the Company representing approximately 21.95% of the
Company's enlarged issued share capital.

For further information please contact:

Stephen Green, Chief Executive
Galleon Holdings plc
Tel. 020 8742 3636

John Bick/Adam Reynolds
Hansard Group
Tel. 020 7245 1100

Robert Kidson/Nicola Horton
Smith & Williamson Corporate Finance Limited
Nomad & Broker
Tel: 020 7131 4000

Notes to editors:

Galleon Holdings plc is an AIM-listed intellectual property owner and developer
in the entertainment sector.



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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