British lottery betting brokerage firm, Zeal Network SE, has announced the launch of a voluntary all-share takeover plan that would see it acquire compatriot Lotto24 AG along with the German operator’s myLotto24 and Tipp24 subsidiaries.
Behemoth in the making:
The London-headquartered firm used an official Monday press release to declare that the proposed deal would see it create an enlarged digital lottery business with annual billings of approximately $570 million from a ‘diverse international footprint’ of over five million customers.
Zeal detailed that its suggested acquisition plan would involve it giving shareholders in Lotto24 AG one of its own shares for every 1.6 they hold in its Frankfurt-listed compatriot. It also stated that it had already obtained ‘irrevocable commitments’ from investors holding around 65% of its target’s shareholding that they intend to support the planned takeover.
The deal would represent something of a reunion for Zeal Network SE as Lotto24 AG was one of its subsidiaries until being spun off as a private enterprise in 2012. Further highlighting the homecoming aspect of the proposed takeover, the firm was known as Tipp24 SE until a 2014 re-branding saw it assume its current designation.
Helmut Becker, Chief Executive Officer for Zeal Network SE, proclaimed that the successful completion of the takeover would also moreover see his firm transform Tipp24 into a locally-licensed online broker by discontinuing its German secondary lottery business in order to strengthen the local market and increase returns to the nation’s 16 states and their beneficiaries.
Becker’s statement read…
“This transaction is good for shareholders, good for customers and good for the German federal states and their lottery beneficiaries. We have held initial and constructive conversations with Lotto24 AG and look forward to further engaging with the management to achieve a successful combination of the businesses. We also look forward to a successful and constructive cooperation with Germany’s state lotteries and invite all shareholders to join us on this journey.”
International growth prospects:
Should it complete its planned takeover of Lotto24 AG, Zeal Network SE explained that it plans to relocate its corporate offices to Germany and pursue opportunities in markets as diverse as the United Kingdom, Spain and Norway in order to create ‘long-term growth and sustained shareholder and customer value.’
Cost synergy benefits:
Jonas Mattsson, Chief Financial Officer of Zeal Network AG, stated that the proposed takeover would result in annual cost synergies of around $65 million and create ‘significant value’ for shareholders while reducing regulatory risks and ‘related uncertainties.’
Mattsson’s statement read…
“With our shared history, we are confident of achieving a seamless integration of both companies. We encourage all holders of Lotto24 AG and Zeal Network AG shares to follow the major shareholders and take part in the offer.”