Canadian gaming software provider Contagious Gaming, which only recently announced the submission of a formal offer to acquire Digitote Limited and Digitote Software GmbH Deutschland in exchange for cash and shares valued at €5 million (CA$7.7 million), has issued confirmation that the company has made an offer to takeover British rival, Sportech.
The announcement came after Sportech responded to growing speculations about a potential Merger and Acquisition (M&A) negotiation with Contagious Gaming. Sportech’s issuance of a statement complies with the UK City Code for Takeovers and Mergers under Rule 2.4.
However, Contagious Gaming clarified that they have yet to issue a firm intention pertaining to its Sportech proposal. In accordance with Rule 2.7, the company still has until September 11, 2015 to do so. Otherwise, the Canadian firm must issue a Statement of Intention Not to Make an Offer as prescribed by Rule 2.8, unless Sportech and the Takeover Panel extend the September 11, 2015 deadline.
Still, Contagious Gaming gave affirmation that cash and shares of stock settlement valued at a price higher than Spartech’s 62.63p price per share as of August 13, 2015, has been proffered as bid price to acquire the UK company’s entire shares of authorized common stocks, subscribed and unsubscribed. According to the Canadian gaming software firm, the proposal put forward aims to create considerable value that would benefit present and future shareholders of both Contagious Gaming and Sportech.
Contagious Gaming added that the M & A proposal, is subject to several conditions, which include obtaining debt and equity financing support in order to fund appropriately the proposed Sportech acquisition deal . The company maintains that there is no certainty that the proposal submitted initially, will lead to a formal offer or even to the completion of an M & A transaction.
Nonetheless, Contagious Gaming provided the underlying rationale contemplated on as main considerations in its decision to submit a preliminary offer. A Contagious Gaming and Sportech business combination would create the largest Toronto Stock Exchange (TSX) gaming company, focused solely on play sports. The new entity created by the proposed business combination, will create a technology-driven business organization, devoted to developing online and mobile sports betting and lottery gaming solutions, and involving the largest private sports lottery in the UK.
Once the Digitote acquisition attains completion and after Sportech’s adjusted Earnings Before Interests, Taxes, Depreciation and Amortization (EBITDA) has been reflected in the British firm’s 2014 Annual Report, Contagious Gaming envisions creating a new company posing as the foremost sports betting entity to offer fixed-odds and pari-mutuel betting products for live in-play betting on a global scale.
After all, the fulfillment of the Digitote acquisition deal will give Contagious Gaming, ownership and control over the Dutch company’s business-to-business (B2B) proprietary sports betting platform “Xturf Server System.” The Digitote software has the capability to manage seamlessly, multi-channel betting operations including land-based, online, mobile, self-service terminals and exclusive hospitality recognition and systems. The platform readily allows third-party integration and furnishes end-users a “shared wallet” for multi-channel betting.