The Board of Sportech Plc has confirmed that talks with US investment firm Standard General have been terminated.
This announcement follows Standard General’s revelation this morning that it did not intend to make an offer for the firm.
Wagering and racing systems provider Sportech Plc revealed at the start of December that it had entered into a conditional agreement to sell its Global Tote business for a reported £30.9 million.
The Global Tote business provides technology and services to numerous gambling enterprises around the world.
Sportech has subsequently been involved in talks with Standard General since 3 December, which included information sharing as part of a due diligence agreement to allow the potential buyer to make a firm offer.
After considering Standard General’s initial offer and taking the views of major company shareholders, the Sportech board came to the conclusion 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’.
In its own statement, Standard General said that an offer was not made because it was unable to justify a higher bid, having previously expressed an interest in November with two offers, the first of which amounted to 25.0 pence per share.
The second offer of 28.5 pence per share offered Sportech investors a 57% premium on the firm’s October London Stock Exchange (LSE) closing price of 18 pence per share, but was formally rejected by the Sportech board.
Standard General subsequently revealed that a review valuing Sportech at £54 million had been rejected, and the New York-hedge fund stated it had no intention of acquiring the Bristol-based firm via a buyout of its LSE shareholdings.
Following the recent announcement, Sportech maintains that the terms of the Disposal is in the best interests of the company and its shareholders, and has encouraged its shareholders to vote via proxy – due to COVID-19 related restrictions – in favour of the resolution to approve the Disposal.