Sportech Rebuffs $71 Million Takeover Bid from Standard General, Major Twin River Shareholder
Posted on: November 6, 2020, 10:20h.
Last updated on: November 6, 2020, 11:03h.
Sportech said it had received two all-cash offers from the New York-based investment firm, which owns a 38 percent stake in Twin River Holdings, soon to be renamed Bally’s.
Both bids “fundamentally undervalued” the company’s business and prospects, the board said. The most recent, on October 28, priced Sportech at £54 million ($71 million) or 28.5p per share.
The news broke Thursday evening, as Standard chose to disclose the rejected bids to Sportech shareholders in an effort to turn up the heat.
“The Sportech board has rejected all proposals to date and declined to enter into discussions which might allow Standard to proceed to a firm offer,” read the statement from Standard General.
Standard General still hopes to engage with the Sportech board, with the goal of securing a recommended transaction that it believes is highly attractive and in the best interests of all Sportech shareholders.”
But analysts told the London Evening Standard that Sportech’s shareholders would back the board’s rejection of the offer.
Having publicized its interest, the hedge fund is now required to either announce a firm intention to make an offer for Sportech or back off permanently, in accordance with the UK’s Takeover Code.
Deal Off Track
Sportech has a footprint in 38 countries, supplying technology and services solutions for the pari-mutuel betting industry, including many US racetracks. It also owns a network of off-track betting venues in Connecticut under the Winners brand, and provides online lottery solutions to numerous operators worldwide.
The company used to run “the Football Pools,” a sports lottery that was once the most popular gambling product in the UK until it was eclipsed by the advent of the National Lottery and online sports betting.
But Standard is likely to be interested in Sportech’s burgeoning US operations. The firm is best known for acquiring clothing company American Apparel from Chapter 11 bankruptcy. But it has recently been making significant inroads into the gaming space through its position in Twin River.
Standard has been gradually increasing its equity in the Rhode Island-based casino operator and has recently used its influence to expand the company’s portfolio.
Twin River has been snapping up properties formerly owned by Caesars and Eldorado Resorts, which the two merging companies were happy to offload to win the blessing of antitrust regulators for their $17 billion deal.
On Thursday, gaming regulators in New Jersey approved Twin River’s acquisition of Bally’s. The company has pledged to spend $90 million renovating Atlantic City’s poorest-performing casino property.