Zeal claims EGM delay could derail Lotto24 takeover
Online lottery brokerage Zeal Network has claimed it would be forced to terminate its bid to acquire Lotto24 if shareholders give in to Lottoland’s demand to delay a planned extraordinary meeting.
Zeal says that the takeover would collapse if the January 18 meeting, at which the operator intends to have shareholders ratify the acquisiton, is adjourned. It noted that under Germany's takeover law process framework, it would then be forced into a 12-month cooling-off period before it could make another offer for Lotto24.
Lottoland, an investor in Zeal, has emerged as a vocal critic of the proposed deal, claiming that it could result in a massive loss of billings and lower profit margins for the combined group. The lottery betting operator has also accused Zeal of acting in the interests of certain shareholders rather than creating value for all stakeholders.
This prompted the lottery betting giant to have the January 18 meeting adjourned in order for shareholders to gather additional information on the proposals. It also suggested that it would look to launch a rival bid to acquire Lotto24 at a later date, allowing shareholders to choose between two competing bids.
Zeal chief executive Helmut Becker said that no such bid had been tabled, and that there was no evidence to suggest that an alternate, serious proposal will be put forward.
“We remain open to discussing serious proposals until January 18 when our shareholder meeting will take place as planned,” Becker said. “However, seven weeks have already passed since we first announced our proposal, and we are already holding the meeting towards the end of the regulatory timetable.
“Our plan to reunite Zeal and Lotto24 has the strongest strategic rationale, offers the best opportunity for sustainable growth and creates the most value for Zeal’s shareholders.”
Lottoland is yet to issue an official response to the latest statement from Zeal.
Zeal announced the proposed takeover in November, saying that the combined company would create a digital lottery business with over five million around the world, billings of around $500m (£391.2m/€436.3m) and a diversified international footprint.
Lotto24, which originally operated as Zeal’s German lottery brokerage division, was spun off as an independent businessfrom the group in 2012.
Meanwhile, Lottoland has been awarded online betting and gaming licences by Swedish regulator Spelinspektionen for the country’s newly regulated online gaming market.
Lottoland will use its licence to operate Lottoland.se, allowing Swedish consumers to bet on lotteries from around the world and play a range of casino games.
http://www.igamingbusiness.com/news/zeal-claims-egm-delay-could-derail-lotto24-takeover