Betting technology group Sportech has received and rejected multiple takeover offers from a US hedge fund valuing it at up to £54 million, it emerged today.
The company which runs the tech behind The Tote and used to run the UK Football Pools, said the bids from Standard General undervalued it.
Standard General is best known for investing in the bankruptcy proceedings of US fashion enfant terrible American Apparel.
It has gambling experience, having invested previously in the Aliante Casino and Hotel group, which it also bought into during financial difficulties before it was sold in 2016.
Standard General said it had made several approaches with a view to making a cash offer for Sportech, “all of which have been rejected”.
The most recent approach was made on 28 October at 28.5 pence per share.
“This values the existing share capital of Sportech at approximately £53.8 million and represents a premium of 58.33% to the Sportech closing share price of 18 pence on 27 October 2020,” it said.
Sportech’s board had declined even to enter discussions, it said, leading it to go public with its offer so shareholders could consider it.
Sportech responded today with a statement confirming the offers, saying the latest bid “fundamentally undervalues Sportech's businesses and prospects.”
Analysts said the target’s shareholders, led by Lombard Odier, North Atlantic Smaller Companies Investment Trust and Schroders, would back the board’s rejection of the offer.
Shares in Sportech were 83p in 2018 but have plummeted since.
The company used to run the UK Football Pools, which it bought from Littlewoods in 2000 after the Pools were hit by the advent of the National Lottery.
Analysts said the bidder is probably interested in snapping up its operations in the US, which is deregulating gambling.
It has its own gambling venues in Connecticut, although these are fairly small and have had a tough time during Covid, but also has 29,000 betting terminals across 38 countries for various clients, spanning sports betting and lotteries.
A Standard General spokesperson said: “Because of the movement in Sportech’s stock price, under the disclosure requirements of the takeover code, we were required to make a public announcement. Going forward, we’re looking forward to engaging with the company and its stockholders."
