18th Aug 2015 07:04
LONDON (Alliance News) - Contagious Gaming Inc, the company currently in talks with Sportech PLC about a potential merger, Monday outlined its rationale for its potential takeover offer that could lead to the formation of a "combined, technology-focused, sports wagering company".
Last Friday, Sportech received an initial proposal from Contagious Gaming and said it would only recommend an offer that was at a premium to its closing share price of 62.63 pence last Thursday and would comprise a majority in cash and the balance in new Contagious Gaming shares.
On Monday, Contagious Gaming confirmed it was in talks with Sportech but noted it has not made a firm intention statement under the City Code on Takeovers and Mergers. Under the takeover code the company must either make a firm intention to make an offer by September 11, or walk away.
Contagious said that a proposal has been made to Sportech about a potential business combination it expects to "create significant shareholder value for existing and potential new shareholders of Sportech and Contagious Gaming."
On Tuesday, Contagious provided an update to Monday's announcement, and said the combined company, if the deal goes through, would be "a combined, technology-focused, sports wagering company and a global leader in regulated pari-mutuel wagering".
The deal is subject to a number of conditions, including securing appropriate debt and equity financing, said Contagious.
"There can be no certainty that the submission of the proposal will lead to Contagious Gaming making a formal offer or, in turn, the completion of the business combination," said Contagious.
Contagious outlined its rationale for the offer, and said the deal would create the "largest pure play sports focused gaming company on the Toronto Stock Exchange" and "a leader in sports betting".
The merged company will combine a technology driven company focused on developing online/ mobile solutions for the sports betting and lottery markets with the UK's largest private sports lottery.
When the offer was made last week, Sportech said any VAT repayment from its "Spot The Ball" game would be split 50:50, with half being returned to Sportech shareholders and the other half going into the then enlarged group following the deal.
That VAT repayment claim is for GBP97 million, and the hearing about the claim will be heard in November, it said.
Sportech shares were up 0.2% to 67.65 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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