LONDON (dpa-AFX) - U.K.-based online sports betting and gaming firm Sportingbet Plc (SBT.L) Friday announced the disposal of its Turkish language website and associated offshore assets to East Pioneer Corp. B.V., for a minimum consideration of 125 million pounds in cash.
East Pioneer is a newly incorporated, Netherland Antilles company. It is backed by GVC Sports B.V., a subsidiary of British online gaming firm GVC Holdings Plc (GVC.L). Sportingbet stated that the disposal is structured to be a three year earn-out followed by a balancing final payment.
The company said the sale is in line with its strategy of increasing proportion of net gaming revenue from regulated markets. Following the disposal, regulated net gaming revenue is expected to represent about 70 percent of total net gaming revenue in the current financial year.
In the financial year ended July 31, 2011, the Turkish language website business generated net gaming revenue of 49 million pounds, representing 24 percent of the Group total and operating profit of 35.2 million pounds.
Sportingbet plans to reinvest the proceeds to enhance growth in its regulated markets, either by specific marketing investment or in-fill acquisitions, or investment in new geographies.
Andrew McIver, Chief Executive of the company said, 'Following this disposal, Sportingbet will derive the large majority of its earnings from regulated territories. The proceeds from the sale of this unregulated income stream will be used to drive forward the rest of the Group. We have clearly shown our strategic intent and look to the future with confidence.'
Further, Sportingbet has agreed to continue to provide certain services to the business on a transitional basis for a limited period from completion.
In mid-August, GVC Holdings had confirmed that it is in exclusive talks with Sportingbet for the possible purchase of its Turkish language website business.
Sportingbet itself is a takeover target of Britain's biggest betting firm Ladbrokes Plc (LAD.L), which withdrew its merger talks with online gambling company 888 Holdings Plc (888.L) in April.
SBT.L is currently trading at 39.45 pence, up 0.70 pence or 1.81 percent, on a volume of 3.23 million shares on the LSE.
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© 2011 AFX News
