Sportingbet to buy Centrebet for $183m

rainmaker

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Centrebet agrees to Sportingbet takeover​

London-listed online gaming company Sportingbet Plc has struck it lucky in the Australian market after internet gaming and wagering firm Centrebet International Ltd agreed to its $183 million takeover offer.

Shares firm Centrebet rose almost six per cent, or 11 cents, to close at $1.95 on Friday, its highest since January 2009, on the news.

Centrebet managing director Michael McRitchie said the offer was "demonstrably attractive".

A combination with Sportingbet would make Centrebet a "stronger business in the Australian market," he said on Friday.

Under the terms of the deal, Centrebet shareholders and performance rightholders will receive $2.00 per Centrebet share.

The proposed acquisition is subject to Sportingbet raising cash to fund the deal, which is to be funded 50:50 by a share issue and sale of bonds.

Centrebet said its board would recommend the deal to shareholders unanimously in the absence of a superior proposal.

The Kafataris family, which holds 59.66 per cent of Centrebet, intends to vote in favour of the deal.

"The Centrebet board believes the company is well positioned to continue to deliver strong growth into the future," Centrebet chairman Graham Kelly said.

"Notwithstanding this, we believe that this is a very attractive outcome for Centrebet securityholders and, subject to the relevant conditions being satisfied, the board will recommend that securityholders vote in favour of the schemes."

Centrebet shareholders will be entitled also to 90 per cent of net proceeds from the company's proposed claim against the Australian Taxation Office over a global GST dispute.

Centrebet said the takeover by Sportingbet would be funded by a STG65 million ($A100.34 million) share issue and a STG65 million ($A100.34 million) issue of convertible bonds, for which Sportingbet already had received firm orders.

Centrebet expects the transaction to be completed by September 2011.

The Centrebet board has appointed Lonergan Edwards and Associates to report on whether the deal is in the best interests of Centrebet shareholders.

The deal came on the same day as he federal government gave bookmakers 12 months to rein in their spruiking of betting during sports broadcasts.

Council of Australian Governments (COAG) representatives met in Canberra on Friday and decided that action to reduce and control the promotion of live odds during sports coverage was needed.

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jetset

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The Aussie market is under some political pressure at present, with moves to restrict odds publishing during televised games and a ban on in-game betting by June next year.

Nevertheless, it appears to be a very desirable market that has attracted major UK companies, one of which is the subject of rainmaker's post above.

Sportingbet has been raising capital for the Centrebet acquisition (it needs around GBP 130 million to include various costs associated with the deal, apparently) and had no problem in raising the first GBP65 million on Thursday through the issue of convertible bonds.

The other GBP65 million was launched Friday as a firm placing and open offer. I haven't seen any further reports on that yet, but given Sportingbet's positive Q3 report earlier in the week and its very competent management I would expect it to be successful.

Sportingbet management have highlighted success in Oz as an important contributor to their latest results btw.
 

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