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Highbury House - Buys Paragon for £32m

August 2003

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Having acquired Cabal just two months earlier, Highbury has announced the acquisition of Paragon, which means that 80% of its total sales now come from consumer publishing. Paragon is a leading publisher of special interest consumer magazines in the videogames, personal computing and home entertainment sectors. The strongest area is games titles, where Paragon is the largest publisher of unofficial games titles. Highbury is not issuing new shares to fund the purchase but is instead using additional loan facilities of £22m with a further £10m loan (at better rates) to fund Paragon’s working capital requirement. There is also a loan note/share alternative.Paragon was acquired by its current management team led by Mark Sim ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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