The Board of Sportech Plc has reported that talks have been terminated with the US investment company Standard General.
This announcement follows this morning’s disclosure by Standard General that it did not plan to make an offer for the company.
At the beginning of December, wagering and racing systems provider Sportech Plc announced that it had entered into a conditional agreement for a record £ 30.9 million to sell its Global Tote business.
The Global Tote company provides various gambling companies around the world with technology and services.
Since 3 December, Sportech has subsequently been engaged in talks with Standard General, which included the exchange of information as part of a due diligence agreement in order to allow the potential buyer to make a firm bid.
After evaluating the initial offer of Standard General and taking the views of major company shareholders, the Sportech Board concluded that the investment firm’s proposal of 32.5 pence per share did not ’adequately value the businesses and prospects of Sportech, in the light of both the execution risk attached to Standard General’s proposal and the company’s other options to create shareholder value, including the proposed disposal of its Global Tote business to BetMakers Technology Group.’.
Standard General claimed in its own statement that an offer was not made because it was unable to warrant a higher bid, previously having expressed interest in two bids in November, the first of which amounted to 25.0 pence per share.
The second bid of 28.5 pence per share offered Sportech investors a 57% premium at the closing price of 18 pence per share on the October London Stock Exchange (LSE) of the company, but was formally refused by the Sportech board.
Subsequently, Standard General announced that a review valuing Sportech at £ 54 million had been dismissed, and the New York-hedge fund confirmed that it did not plan to purchase the Bristol-based business through a buyout of its LSE shares.
Following the recent announcement, Sportech maintains that the terms of the disposal are in the best interests of the company and its shareholders and, owing to COVID-19 relevant constraints, has urged its shareholders to vote by proxy in favour of the resolution to approve the disposal.