Listed wagering and gaming company Centrebet has launched a hostile cash takeover for rival group International All Sports, playing on its target’s weak share price performance and the heavy losses suffered from its international operations.
Centrebet, which is controlled by leading book-maker Con Kafataris, is offering 28c a share for IAS, controlled by veteran bookmaker Mark Read, but will lift that offer to 33c a share should it reach 90 per cent. IAS shares last closed at 16c.
The bids value IAS at $18.6 million and $21.9 million respectively. Read owns a 27 per cent stake.
The bid has been launched just months after IAS concluded an asset sales process that failed to attract what it considered to be a decent enough offer.
Centrebet was one of those companies that took part in that process, and its bid is subject to the removal of confidentiality and standstill agreements that it signed at the time.
Centrebet is receiving advice from a Wilson HTM team led by Tony Jones and Scott Colvin, and David Selig from legal firm Addisons. IAS is yet to respond, but used local boutique advisory firm VMC Global and the London-based Torch Partners Corporate Finance on its asset sales process.
Centrebet sees strong synergies in the two businesses, but it is not clear what it would do with CanBet, which has been the source of much of IAS problems and returned a loss of $8 million in 2008.
The woes of CanBet began in late 2006 with the US decision to ban online gaming, and then its failure to attract good business in the international football betting market. In comparison, IAS’ Australian businesses have been performing well, nearly doubling EBIT in the past year to $12.3 million.
Centrebet says IAS has been a poorly performing company, paying only one dividend of 1.5c a share in the past five years, and with its share price down more than 90 per cent from its 1999 float price of $2.
Centrebet says the future of IAS is uncertain given the aggressive nature of international competitors, the challenging economic outlook and the adverse impact from the introduction of product fees.
Kafataris and other family members hold around 59 per cent of Centrebet, which has a market capitalisation of around $117 million. (Business Spectator)
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