5th of December 2012 Author: Johnny Karp
This week, William Hill and GVC Holdings have reached a conditional agreement on a revised proposal (RP) with Sportingbet, which will set out a Sportingbet share valuation of 56.1 pence each along with the previously communicated proposed final dividend of 1.1 pence/share based on the closing middle-market GVC share price of 233.5 pence on October 15, 2012.
Namely, what the RP implies is a 5 pence per share cut from its previous offer due to Sportingbet's disappointing first-quarter report when it noted a 35 percent drop in revenue. Therefore, the new offer includes 44.8 pence in cash, 1.1 pence dividend in cash and 0.0435 new GVC shares per Sportingbet share implying a fully diluted equity valuation for Sportingbet of around GBP 485 million, less than the GBP 530 million previously offered.
Also, the RP suggests a 'mix and match' facility, which will give Sportingbet shareholders the chance to apply to receive proportionately more cash or more GVC shares.
The RP was supported by major Sportingbet shareholders, including DBS Advisors Ltd., Mark Blandford, Rockridge Investments SA and various Blandford family trusts, and Henderson Global Investors Ltd., who jointly hold 74,664,168 Sportingbet shares or around 11.2 percent. They stated that they currently plan to elect to receive the maximum amount of new GVC shares available under the mix and match facility.
In addition, a confirmation arrived to Will Hill and GVC from Sportingbet's Board that if an offer based on the terms of the RP were made, it would expect to unanimously recommend the deal to Sportingbet shareholders.
It was also specified that the deadline to either announce a firm intention to make an offer for Sportinget or walk away from the deal will be extended to December 18, 2012 at 17h00, and that William Hill and GVC plan to remain committed to working exclusively with each other in relation to any possible offer for Sportingbet.
This RP will be the final proposal for Sportingbet unless another third party announces its intention to make an offer.
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