ZEAL Network SE announces takeover offer for -4-

DJ ZEAL Network SE announces takeover offer for Germany's largest private digital lottery broker Lotto24 AG

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ZEAL Network SE (-) 
ZEAL Network SE announces takeover offer for Germany's largest private 
digital lottery broker Lotto24 AG 
 
19-Nov-2018 / 08:30 CET/CEST 
Dissemination of a Regulatory Announcement, transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION (IN WHOLE OR IN PART) DIRECTLY 
OR INDIRECTLY IN, INTO OR FROM THE UNITED STATES OF AMERICA OR ANY OTHER 
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT 
LAWS OF SUCH JURISDICTION. 
 
*Press release* 
 
*ZEAL Network SE announces takeover offer for Germany's largest private 
digital lottery broker Lotto24 AG* 
 
· _The transaction will create a digital lottery group with currently more 
than 5 million combined customers globally, current combined billings of 
about EUR 500 million, and a diverse international footprint_ 
 
· _The combined group will build on the existing position of Lotto24, 
discontinue the German secondary lottery business of Tipp24 and transform 
it to a locally licensed online broker. The companies jointly aim to 
accelerate growth of online brokerage in the EUR 8.7 billion German 
lottery market_ 
 
· _The all-share takeover delivers significant benefits for shareholders 
with expected cost synergies of EUR 57 million per year, strong future 
cash generation, and a reduced risk profile_ 
 
· _The transaction strengthens the German lottery market and returns to 
federal states and their lottery beneficiaries_ 
 
· _ZEAL expects to offer one new ZEAL share for ca. 1.6 Lotto24 shares, 
reflecting the ratio of the volume-weighted average prices of ZEAL and 
Lotto24 shares over the past three months_ 
 
· _ZEAL has secured irrevocable commitments to accept the offer from major 
shareholders representing approximately 65% of Lotto24 shares_ 
 
*(London, 19 November 2018)* 
 
ZEAL Network SE ('ZEAL') today announced an all-share voluntary takeover 
offer for Germany's largest private digital lottery broker, Lotto24 AG 
('Lotto24'). On completion, the transaction will create a digital lottery 
group with currently more than 5 million combined customers globally, 
current combined billings of about EUR 500 million, and a diverse 
international footprint. 
 
In the context of the deal, and consistent with its renewed strategy to 
de-risk its business model and focus on locally-licensed businesses, ZEAL 
intends to transform its German secondary lottery business into a locally 
licensed online brokerage model after reacquiring control of its myLotto24 
and Tipp24 subsidiaries and, in due course, to relocate ZEAL to Germany. The 
transaction will significantly strengthen the German lottery market and 
expand returns to federal states and their lottery beneficiaries. 
 
*A strong platform for accelerated growth and shareholder value creation* 
 
The transaction combines the strong balance sheet, high-quality loyal 
customer base, and technological capabilities of ZEAL with the proven 
expertise of Lotto24 in the German lottery brokerage market. The enlarged 
Group will be in a unique position to accelerate online brokerage growth in 
the German lottery market. 
 
The Group will also continue to pursue its international growth ambitions, 
building on the existing, diverse international portfolio (UK, Ireland, 
Spain, Norway, and Netherlands) and global development pipeline of ZEAL, 
with the aim of creating long-term growth and sustained shareholder and 
customer value. 
 
ZEAL believes that the change to its business model in Germany will deliver 
significant benefits to ZEAL shareholders in the medium term as a result of 
reduced operational, tax and regulatory risk as well as improved growth 
potential. As part of the business model change, ZEAL has taken the decision 
to discontinue certain products and to focus on less volatile brokerage 
income in the German market, resulting in net annual run-rate revenue 
dis-synergies of ca. EUR 107 million, which is expected to be compensated 
for over time through accelerated growth of the enlarged Group. The 
combination with Lotto24 is also expected to deliver annual run-rate cost 
synergies of c. EUR 57 million through greater platform efficiencies and 
significant reductions in other operational costs. Further details of these 
revenue dis-synergies and cost savings are set out in Appendix A to this 
announcement. 
 
In addition, ZEAL management has identified further cost savings of 
approximately EUR 4 million, which do not arise as a consequence of the 
transaction and sees additional potential future upside. 
 
*Dr Helmut Becker, CEO of ZEAL, said:* 'ZEAL will reunite with Germany's 
largest digital lottery broker. We will have a significantly enlarged, loyal 
customer base, strong technology and marketing platforms, and an 
exceptionally experienced team. Together with our plans to regain control of 
Tipp24 and transform its German business models, this puts us in an 
excellent position to accelerate online growth in both the EUR 8.7 billion 
German lottery market and EUR 270 billion global lottery sector - as a 
locally-licensed broker, licensed operator, and lottery investor. This 
transaction is good for shareholders, good for customers, and good for the 
German federal states and their lottery beneficiaries. We have held initial, 
constructive conversations with Lotto24 and look forward to further engaging 
with the management to achieve a successful combination of the businesses. 
We also look forward to a successful and constructive cooperation with 
Germany's state lotteries and invite all shareholders to join us on this 
journey.' 
 
Since its IPO on the Frankfurt Stock Exchange in 2012, Lotto24 has grown 
rapidly. In 2017, Lotto24 generated billings of EUR 220.7 million and 
revenues of EUR 25.2 million. In October 2018, Lotto24 upgraded its full 
year guidance, anticipating billings' growth of between 38% and 43% for 
2018. In the first nine months of 2018, the company increased billings by 
43% to EUR 235.9 million, revenues grew almost 50% to EUR 28.1 million, and 
the total number of registered customers rose by 36% to 2.04 million. 
 
ZEAL has nearly two decades' experience as an online lottery operator, 
reseller and investor. In 2017, ZEAL delivered billings of EUR 280.5 million 
and revenues of EUR 134.3 million. In the first nine months of 2018, 
billings increased 5% to EUR 212.4 million, revenues rose by 19% to EUR 
111.2 million, and the number of new customers grew by 54%, taking the total 
number of registered customers of the Group to more than 3.5 million. 
 
*Transaction supported by major Lotto24 shareholders* 
ZEAL will offer Lotto24 shareholders the opportunity to exchange their 
Lotto24 shares for shares in ZEAL. The offer consideration will reflect the 
ratio of the volume-weighted average share prices of both Lotto24 and ZEAL 
over the past three months before announcement of the transaction. Subject 
to the final determination of the minimum prices required by law and the 
final terms set forth in the offer document, ZEAL intends to offer one new 
ZEAL share as consideration in exchange for each ca. 1.6 tendered shares of 
Lotto24. Independently of the offer, ZEAL expects to pay an ordinary interim 
dividend of EUR 1.00 by year-end 2018. 
 
In a clear statement of shareholder support for the deal, ZEAL today entered 
into irrevocable tender agreements with major shareholders of Lotto24, 
namely with Günther Group, Working Capital and Jens Schumann. They represent 
approximately 65% of the shares and voting rights in Lotto24. By entering 
into the tender agreements, these shareholders have undertaken to tender 
their shares in Lotto24 into the offer. 
 
*Jonas Mattsson, Chief Financial Officer of ZEAL*: 'We believe this deal 
creates significant value for ZEAL and Lotto24 shareholders. The future 
growth prospects, significant reduction of regulatory risk and the related 
uncertainties, and EUR 57 million of annual cost synergies make the combined 
group a highly attractive long-term investment proposition. With our shared 
history, we are confident of achieving a seamless integration of both 
companies. We encourage all holders of Lotto24 and ZEAL shares to follow the 
major shareholders and take part in the offer.' 
 
The offer will be made in accordance with the conditions to be set forth in 
the offer document, among others a minimum acceptance rate of 50% plus one 
share of Lotto24. Further details of the offer and its terms, including the 
acceptance period, will be contained in the offer document. ZEAL expects 
that the offer document will be published on the website www.zeal-offer.com 
at the beginning of 2019. 
 
An extraordinary general meeting of ZEAL is expected to be held at the end 
of December 2018, at which ZEAL will ask its shareholders to approve the 
offer, including the acquisition of Lotto24 shares from certain members of 
the Supervisory Board of ZEAL or persons connected with them, and authorise 
the Executive Board to allot a number of shares as required to fund the 
offer. As Günther Group has made it a condition to its tender agreement with 
ZEAL that it will not, as a consequence of the offer, be subject to a legal 
obligation to make a general offer for the shares in ZEAL which it does not 
own at that time, ZEAL will furthermore propose a resolution to its 
shareholders (other than Günther Group and persons acting in concert with 
Günther Group) to approve the waiver of such obligation granted by the Panel 
on Takeovers and Mergers. The ZEAL shareholder approvals will be a condition 
for ZEAL to publish the offer document. 
 
Discussions with the German gambling regulatory body about the future 
licensing arrangements for the enlarged Group have already been initiated. 
ZEAL expects to complete the transaction in the first half of 2019. 
 
*Updated ZEAL Profit Guidance* 
 
As previously announced today, the Executive Board has decided to adjust the 

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DJ ZEAL Network SE announces takeover offer for -2-

upper end of the ZEAL Group EBIT forecast range for the financial year 2018. 
The Executive Board now anticipates EBIT in the range of EUR 33 million to 
EUR 38 million (previously EUR 33 million to EUR 43 million). The adjustment 
includes the impact of the transaction costs in connection with the 
announced intention of ZEAL to make a public takeover offer for Lotto24 AG 
as well as restructuring expenses in connection with an internal cost 
savings programme initiated today. 
 
Except for the narrowing of the previously forecasted EBIT range, the 
Executive Board confirms its previously published guidance and expects the 
ZEAL Group to generate Total Operating Performance (TOP) of EUR 150 million 
to EUR 160 million in the financial year 2018. 
 
*ENDS 
 
Additional information* 
 
ZEAL invites media, investors and analysts to two separate webcasts and 
conference calls today to present the rationale and details of the 
transaction. The webcasts will be hosted in English by Dr Helmut Becker, CEO 
and Jonas Mattsson, CFO of ZEAL. 
 
*ZEAL Network SE Media Webcast and Conference Call:* 
 
Date: Today, 19 November 2018, 11.15 am CET / 10.15 am GMT 
ConferenceCall dial-ins 
Germany: [phone] 
UK: [phone] 
USA: [phone] 
Confirmation code: 46065908# 
Audio-Webcast: https://webcasts.eqs.com/zeal2420181119media 
A replay of the webcast will be available under the same link after 
conclusion of the conference call. 
 
*ZEAL Network SE Investor and Analyst Webcast and Conference Call:* 
 
Date: Today, 19 November 2018, 12.00 pm CET / 11.00 am GMT 
Conference Call dial-ins 
Germany: [phone] 
UK: [phone] 
USA: [phone] 
Confirmation code: 70491804# 
Audio-Webcast: https://webcasts.eqs.com/zeal20181119investors 
A replay of the webcast will be available under the same link after 
conclusion of the conference call. 
 
*Press contact:* 
ZEAL Network 
Matt Drage 
Head of Corporate Communications 
T: [phone] 
[e-mail] 
 
ZEAL Network 
Frank Hoffmann 
Investor Relations Manager 
[phone] 
[e-mail] [1] 
 
FTI Consulting 
Lutz Golsch 
T: [phone] 
M: [phone] 
[e-mail] 
 
*Important note* 
This announcement is for information purposes only and neither constitutes 
an offer to purchase or exchange nor an invitation to sell or to make an 
offer to exchange, securities of Lotto24 AG ('Lotto24') or ZEAL Network SE 
('ZEAL'). The final terms and further provisions regarding the public 
takeover offer will be disclosed in the offer document once its publication 
will have been approved by the German Federal Financial Supervisory 
Authority (Bundesanstalt für Finanzdienstleistungsaufsicht). ZEAL reserves 
the right to deviate in the final terms and conditions of the public 
takeover offer from the basic information described herein. Investors and 
holders of securities of Lotto24 are strongly recommended to read the offer 
document and all announcements in connection with the public takeover offer 
as soon as they are published, as they contain or will contain important 
information. 
 
The offer will be made exclusively under the laws of the Federal Republic of 
Germany, in particular under the German Securities Acquisition and Takeover 
Act (Wertpapiererwerbs- und Übernahmegesetz (WpÜG)). The offer 
will not be made pursuant to the provisions of jurisdictions other than 
those of the Federal Republic of Germany. Therefore, no other announcements, 
registrations, admissions or approvals of the offer outside of the Federal 
Republic of Germany have been filed, arranged for or granted. 
 
The ZEAL shares have not been and will not be registered under the U.S. 
Securities Act of 1933, as amended, or with any securities regulatory 
authority of any state or any other jurisdiction of the United States of 
America ('USA'). Therefore, subject to certain exceptions, ZEAL shares may 
not be offered or sold within the USA or in any other jurisdiction where to 
do so would be a violation of applicable law. There is no public offering of 
ZEAL shares in the USA. 
 
To the extent this announcement contains forward-looking statements, such 
statements do not represent facts. Forward-looking statements include all 
matters that are not historical facts. They are characterised by the words 
'expect', 'believe', 'estimate', 'intend', 'aim', 'assume', 'plan' or 
similar expressions. Such statements express the intentions, opinions or 
current expectations and assumptions of ZEAL and the persons acting in 
conjunction with ZEAL, for example with regard to the potential consequences 
of the takeover offer for Lotto24, for those shareholders of Lotto24 who 
choose not to accept the takeover offer or for future financial results of 
Lotto24. Such forward-looking statements are based on current plans, 
estimates and forecasts which ZEAL and the persons acting in conjunction 
with it have made to the best of their knowledge, but which do not claim to 
be correct in the future. Forward-looking statements are subject to risks 
and uncertainties that are difficult to predict and usually cannot be 
influenced by ZEAL or the persons acting in conjunction with it. Actual 
events or consequences may differ materially from those contained in or 
expressed by such forward-looking statements. 
 
This release and any materials distributed in connection with this release 
are not directed to or intended for release, publication or distribution (in 
whole or in part) directly or indirectly into or from the USA or any other 
jurisdiction where to do so would constitute a violation of the relevant 
laws of such jurisdiction, nor are they directed to, or intended for use by, 
any person or entity that is a citizen or resident or located in the USA or 
in any locality, state, country or other jurisdiction where such release, 
distribution, publication, availability or use would constitute a violation 
of the relevant laws of such jurisdiction or which would require any 
registration or licensing within such jurisdiction. 
 
Lazard & Co., Limited ('Lazard'), which is authorised and regulated in the 
United Kingdom by the Financial Conduct Authority, is acting exclusively for 
ZEAL Network SE and no one else in connection with the proposals referred to 
in this document. Lazard will not be responsible to anyone other than ZEAL 
Network SE for providing the protections afforded to clients of Lazard nor 
for providing advice in relation to any of the matters referred to or 
contemplated in this document. Neither Lazard nor any of its affiliates owes 
or accepts any duty, liability or responsibility whatsoever (whether direct 
or indirect, whether in contract, in tort, under statute or otherwise) to 
any person who is not a client of Lazard in connection with this document, 
any statement or report contained herein, any of the matters referred to or 
contemplated in this document or otherwise. 
 
*Appendix A* 
 
*QUANTIFIED FINANCIAL BENEFITS STATEMENT* 
 
*Part A* 
 
This Announcement contains statements of estimated cost savings, revenue 
synergies and dis-synergies arising from the Combination (together, the 
'Quantified Financial Benefits Statement'). 
 
A copy of the Quantified Financial Benefits Statement is set out below. 
 
'The Executive Board of ZEAL (the 'ZEAL Board') believes the following: 
 
*Cost synergies* 
 
The quantified recurring pre-tax cost synergies expected to result from the 
Combination principally arise from: 
 
*a) Business model change (non-personnel costs): *Savings in direct costs of 
operations account for around 60 percent of the overall cost synergies: 
 
=- all costs covering the bookmaking risks for the German market (hedging 
costs) will not be required after the transformation to an online brokerage 
business; 
=- reduction of non-deductible VAT within the myLotto24 sub-group. 
 
*b) Organisational efficiency: *Reduction of personnel and other operating 
expenses within the Combined Group, which represents around 40 percent of 
the overall cost synergies and will arise from: 
 
=- removing business related duplicated roles enabled by the migration of 
the German broker businesses of the Combined Group onto one technology 
platform; 
=- removing duplication of central functions roles; 
=- removing duplicates in senior management structure; 
=- rationalisation of the Combined Group's locations; 
=- removing roles related to hedging activities; and 
=- reduction of consultancy expenses / professional fees based on 
de-duplication and changed requirements due to business model change. 
 
The total anticipated cost synergies of EUR 57 million per annum are 
equivalent to approximately 41 percent of the Combined Group operating 
expenses (including personnel expenses) from continuing operations of EUR 
138 million, calculated based on the consolidated audited accounts for each 
of ZEAL and Lotto24 for the financial year ended 31 December 2017. 
 
The ZEAL Board expects that the cost synergy realisation will take place 
progressively, with approximately 80 percent of the total cost synergies 
achieved by the end of year one, rising to 100 percent achieved by the end 
of year two. 
 
*Revenue synergies and dis-synergies* 
 
For the Combined Group it is envisaged that there will be overall *net 
revenue dis-synergies of approximately EUR 107 million,* mainly caused by 
the business model change of ZEAL's myLotto24 subsidiary into a German 
licensed online lottery brokerage business. 
This represents the loss of approximately 67% of the Combined Group's 
revenue of EUR 160 million, calculated based on the consolidated audited 
accounts for each of ZEAL and Lotto24 for the financial year ended 31 
December 2017. 
 
The revenue synergies and dis-synergies will principally comprise: 
 
a) *Business model-related revenue dis-synergies of EUR 120 million *will be 
generated mainly from: 
 
=- billings loss: An overall billings loss due to the customer loss which 
will be caused by the transition into an online brokerage business, and 

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DJ ZEAL Network SE announces takeover offer for -3-

reduced average billings per user, due to the restriction to the DLTB 
product portfolio; and 
=- margin reduction: A reduction in the margin applied to the Group's 
reduced billings, as a result of the lower margin of an online brokerage 
business, relative to the higher margin enjoyed by ZEAL's current secondary 
lottery business. 
 
b) *Revenue synergies of EUR 13 million*: The revenue dis-synergies will be 
offset to some extent by increased billings generated by the Combined Group 
mainly arising from: 
 
=- reduced customer acquisition costs due to improved access to and 
optimization of marketing channels within the Combined Group, which leads to 
more newly registered & active customers; and 
=- decreased legal restrictions and improved customer quality, leading to a 
higher number of active customers and / or higher average spend per user. 
 
The ZEAL Board expects the transformation of the business model to be 
implemented within the first full year following completion. Revenue 
dis-synergies will take effect at the same time as the business model change 
with a full run-rate by the end of year one following completion of the 
Combination. 
 
The revenue synergies realisation will take place progressively, with 
approximately 40 percent of the total revenue synergies achieved by the end 
of year one, approximately 70 percent achieved by the end of year two and 
with full the run-rate effect achieved by the end of year three after the 
completion of the Combination. 
 
*Costs to achieve* 
 
The ZEAL Board expects that implementation of the business model change and 
realisation of the cost and revenue synergies would result in total 
non-recurring costs in the range of approximately EUR 15 million to EUR 20 
million incurred within the first two years following Completion. These 
costs consist mainly of employee restructuring costs and IT migration 
costs.' 
 
*Bases of belief for the Quantified Financial Benefits Statement* 
 
Following initial discussions regarding the Combination, a synergy 
development team was established at ZEAL to evaluate and assess the 
potential synergies available from the Combination. 
 
The team, which comprised senior strategy, financial, technology and 
business personnel at ZEAL, worked to identify and quantify potential 
synergies as well as estimate any associated costs. The team engaged with 
the relevant functional heads and other personnel at ZEAL to provide input 
into the development process and to agree on the nature and quantum of the 
identified synergy initiatives. 
 
In preparing the Quantified Financial Benefits Statement and to estimate the 
merger benefits relating to the Combination, the ZEAL Board has made use of 
publicly available information about Lotto24 along with knowledge it 
continues to have from the period prior to Lotto24's spin-off from ZEAL in 
2012 and as a result of the separation of the technology platform in 2015. 
In circumstances where data has been limited for commercial or other 
reasons, the team has made estimates and assumptions to aid the development 
of individual synergy initiatives. ZEAL did not have access to the Lotto24 
senior management or any current non-public information about Lotto24 and 
its business during the preparation of the Quantified Financial Benefits 
Statement. 
 
The bases used for the quantified exercises are: 
 
=- ZEAL: Full year 2018 P&L forecast data from ZEAL's financial planning 
contains 6 months actuals and 6 months forecast. Revenues and resultant 
synergies / dis-synergies are based on normalised revenue, which has been 
adjusted to match the statistically expected prize pay-out ratio; 
=- Lotto24: Rolling 12 months actual P&L data for the period July 2017 to 
June 2018 has been used as a baseline, as no full year 2018 forecast is 
publicly available. 
 
In arriving at the estimate of synergies set out in this document, the ZEAL 
Board made the following operational assumptions: 
 
=- the Combined Group will migrate the two broker businesses onto one 
technology platform; 
=- policies and procedures will be harmonised according to best practices at 
ZEAL and Lotto24; and 
=- the Combined Group will, wherever possible, utilise existing resource and 
capabilities within ZEAL and Lotto24 to deliver the revenue synergies. 
 
The ZEAL Board has, in addition, made the following assumptions, all of 
which are outside its control: 
 
=- a license and / or license extension will be granted to the Combined 
Group to enable the transformation of the myLotto24 sub group's German 
secondary lottery business into a licensed private online brokerage 
business; 
=- there will be no change to macroeconomic, political, regulatory or legal 
conditions in the markets or regions in which Lotto24 and ZEAL operate that 
materially impact the implementation or costs to achieve the proposed cost 
and revenue synergies; 
=- there will be no material change in current foreign exchange rates; and 
=- there will be no change in tax legislation or tax rates or other 
legislation or regulation in the countries in which Lotto24 and ZEAL operate 
that could materially impact the ability to achieve any benefits. 
 
The assessment and quantification of the potential synergies have in turn 
been informed by ZEAL management's industry experience as well as their 
experience of executing and integrating past acquisitions. 
 
*Further synergies and savings not contingent on the Combination and 
separate to the Quantified Financial Benefits Statement* 
 
Separately, ZEAL plans to achieve, and has already started to implement 
recurring cost savings of approximately EUR 4 million per annum as a result 
of an internal cost saving initiative, which will be delivered by end of 
2018. These additional cost savings are not contingent on the Combination 
and so do not form part of the Quantified Financial Benefits Statement. 
Furthermore, the ZEAL Board believes that additional synergy opportunities 
in revenue and costs can be achieved related to the Combination, which are 
not quantified as part of this Quantified Financial Benefits Statement. 
 
*Reports* 
 
As required by Rule 28.1(a) of the Takeover Code, Ernst & Young, as 
reporting accountants to ZEAL, and Lazard, as financial advisers to ZEAL, 
have provided the opinions required under that Rule. Copies of these reports 
are included at Parts B and C of this Appendix A. Each of Ernst & Young and 
Lazard has given and not withdrawn its consent to the publication of its 
report in this Announcement in the form and context in which it is included. 
 
*Notes* 
 
The Quantified Financial Benefits Statement relates to future actions and 
circumstances which, by their nature, involve risks, uncertainties and 
contingencies. As a result, the cost savings and synergies referred to may 
not be achieved, or may be achieved later or sooner than estimated, or those 
achieved could be materially different from those estimated. 
Due to the scale of the Combined Group, there may be additional changes to 
the Combined Group's operations. As a result, and given the fact that the 
changes relate to the future, the resulting synergies may be materially 
greater or less than those estimated. 
 
No statement should be construed as a profit forecast or interpreted to mean 
that the Combined Group's earnings in the first full year following 
implementation of the Combination, or in any subsequent period, would 
necessarily match or be greater than or be less than those of ZEAL and / or 
Lotto24 for the relevant preceding financial period or any other period. 
 
*Part B 
Report from Ernst & Young* 
 
The Directors 
ZEAL Network SE 
5th Floor -- One New Change 
London 
EC4M 9AF 
 
Lazard & Co. Limited 
50 Stratton Street 
London 
W1J 8LL 
 
19 November 2018 
 
Dear Sirs 
 
We refer to the statement regarding the estimate of expected merger benefits 
statement ('the Statement') made by ZEAL Network SE ('the Company'). The 
Statement, including the relevant bases of belief (including sources of 
information) is set out in Appendix A of the initial announcement of the 
proposed Offer in compliance with the Takeover Code (the 'Announcement') 
issued by the Company dated 19 November 2018. This report is required by 
Rule 28.1(a)(i) of The City Code on Takeovers and Mergers (the 'City Code') 
and is given for the purpose of complying with that rule and for no other 
purpose. 
 
Save for any responsibility that we may have to those persons to whom this 
report is expressly addressed, to the fullest extent permitted by law we do 
not assume any responsibility and will not accept any liability to any other 
person for any loss suffered by any such other person as a result of, 
arising out of, or in connection with, this report or our statement, 
required by and given solely for the purposes of complying with Rule 23.2 of 
the City Code by consenting to its inclusion in the Announcement. 
 
*Responsibility* 
 
It is the responsibility of the directors of the Company ('the Directors') 
to prepare the Statement in accordance with the requirements of the City 
Code. 
 
It is our responsibility to form an opinion as required by the Code as to 
the proper compilation of the Statement and to report that opinion to you. 
 
It is the responsibility of Lazard & Co. Limited to form an opinion as 
required by, and solely for the purpose of Rule 28.1(a)(ii) of the City Code 
as to whether the Statement has been prepared with due care and 
consideration and to report that opinion to you. 
 
*Basis of opinion* 
 
We conducted our work in accordance with Standards for Investment Reporting 
1000 (Investment Reporting Standards applicable to all engagements in 
connection with an investment circular) issued by the Auditing Practices 
Board in the United Kingdom. We have discussed the Statement together with 
the relevant bases of belief (including sources of information) with the 
Directors and with Lazard & Co. Limited. Our work did not involve any 
independent examination of any of the financial or other information 
underlying the Statement. 
 
We do not express any opinion as to the achievability of the cost and 

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revenue synergies, as well as the revenue dis-synergies identified by the 
Directors. 
 
Our work has not been carried out in accordance with auditing or other 
standards and practices generally accepted in other jurisdictions and 
accordingly should not be relied upon as if it had been carried out in 
accordance with those standards and practices. 
 
*Opinion* 
 
In our opinion, the Statement has been properly compiled on the basis 
stated. 
 
Yours faithfully 
Ernst & Young LLP 
 
*Part C 
Report from Lazard* 
 
The Executive Board 
ZEAL Network SE 
5th Floor -- One New Change 
London EC4M 9AF 
United Kingdom 
 
19 November 2018 
 
Dear Sirs, 
 
*Intended public takeover offer for Lotto24 AG by ZEAL Network SE ('ZEAL' or 
the 'Company')* 
 
We refer to the ZEAL Quantified Financial Benefits Statement, the bases of 
belief thereof and the notes thereto (together, the 'Statement') as set out 
in Part A of Appendix A of this announcement, for which the Directors of 
ZEAL (the 'Directors' or 'you') are solely responsible under Rule 28 of the 
City Code on Takeovers and Mergers (the 'City Code'). 
 
We have discussed the Statement (including the assumptions and sources of 
information referred to therein), with the Directors and those officers and 
employees of ZEAL who developed the underlying plans to which the Statement 
relates. The Statement is subject to uncertainty as described in this 
announcement and our work did not involve an independent examination of any 
of the financial or other information underlying the Statement. 
 
You have confirmed to us that all financial and other information relevant 
to the Statement has been disclosed to us. We have relied upon the accuracy 
and completeness of all the financial and other information provided to us 
by, or on behalf of, ZEAL, or otherwise discussed with or reviewed by us, 
and we have assumed such accuracy and completeness for the purposes of 
providing this letter. 
We do not express any opinion as to the achievability of the quantified 
financial benefits identified in the Statement. 
 
We have also reviewed the work carried out by Ernst & Young LLP as auditors 
of the Company and reporting accountants whose responsibility it is to form 
an opinion as required by Rule 28.1(a)(i) of the City Code on Takeovers and 
Mergers that the Statement has been properly compiled on the basis stated 
and that the basis of accounting used is consistent with the Company's 
accounting policies and we have discussed with them the opinion set out in 
Part B of Appendix A of this announcement addressed to yourselves and 
ourselves on this matter. 
 
This letter is provided to you solely in connection with Rule 28.1(a)(ii) of 
the City Code and for no other purpose. We accept no responsibility to the 
Company or its shareholders or any person other than the Directors in 
respect of the contents of this letter. We are acting exclusively as 
financial adviser to the Company and no one else in connection with the 
transaction referenced above in connection with which the Statement has been 
produced and it was solely for the purpose of complying with Rule 
28.1(a)(ii) that you requested us to prepare this letter. No person other 
than the Directors can rely on the contents of this letter and accordingly, 
to the fullest extent permitted by law, we exclude all liability (whether in 
contract, tort or otherwise) to any other person in respect of this letter, 
its contents or the work undertaken in relation to this letter, or any of 
the results or conclusions that can be derived from this letter or any 
written or oral information provided in connection with this letter, and in 
relation to any loss suffered by any such person as a result of, or in 
connection with, this letter. 
 
On the basis of the foregoing, we consider that the Statement, for which you 
as the Directors are solely responsible, has been prepared with due care and 
consideration. 
 
Yours faithfully, 
 
For and on behalf of 
Lazard & Co., Limited 
 
*Part D 
Definitions* 
 
The following definitions apply throughout this Appendix A unless the 
context otherwise requires: 
 
*'Announcement' *--the announcement of the Company on 19 November of its 
intention to make the Offer; 
 
*'Combination' *--the proposed combination of the business of ZEAL and 
Lotto24 following successful completion of the Offer; 
 
*'Combined Group' *--the Existing Group as enlarged by the acquisition of 
control of Lotto24 pursuant to the Offer; 
 
*'Company' or 'ZEAL' *--ZEAL Network SE; 
 
*'Completion' *--The completion of the Combination; 
 
*'DLTB' *--_Deutscher Lotto- und Totoblock_, the German Association of State 
Lottery Companies; 
 
*'Ernst & Young' *--Ernst & Young LLP; 
 
*'Executive Board' *--the executive board of the Company, comprising, at the 
date of this document, Dr Helmut Becker (Chairman of the Executive Board) 
and Jonas Mattsson (Chief Financial Officer); 
 
*'Existing Group' *--the Company, its subsidiaries and its subsidiary 
undertakings and associated undertakings whose results are fully 
consolidated into the Company's annual consolidated accounts, as at the date 
of this document; 
 
*'Lazard' *--Lazard & Co., Limited, independent advisers to the Company; 
 
*'Lotto24' *--Lotto24 AG; 
 
*'myLotto24' *--myLotto24 Limited, an associated undertaking of the Company 
whose results are fully consolidated into the Company's annual consolidated 
accounts and which carries on business in the United Kingdom as a bookmaker; 
 
*'Offer' *--the voluntary takeover offer pursuant to the German Takeover Act 
to be made by the Company to acquire all the issued shares of Lotto24; 
 
*'Takeover Code'* or *'Code'* -- the City Code on Takeovers and Mergers. 
 
ISIN:          GB00BHD66J44 
Category Code: ACQ 
TIDM:          - 
LEI Code:      391200EIRBXU4TUMMQ46 
Sequence No.:  6582 
EQS News ID:   747799 
 
End of Announcement EQS News Service 
 
 
1: mailto:[e-mail] 
 

(END) Dow Jones Newswires

November 19, 2018 02:31 ET (07:31 GMT)