LNG Betshop sale collapses
Leisure & Gaming fails to reach an agreement to sell subsidiary Betshop and could only be days away from going into administration.
Leisure & Gaming (LNG) has failed to agree terms with Spain’s Grupo Pefaco for the sale of its gaming subsidiary Betshop Group, with the company working towards finding a solution at a general meeting later today in order to avoid going into administration in the next few days.
The company confirmed today that talks to sell Betshop Group were ongoing and that it had received other expressions of interest but that the LNG itself was not for sale. Last month LNG announced it had agreed to dispose of Betshop to Pefaco in a deal worth up to 5.3m, conditional upon the signing and delivery of a definitive share purchase agreement for Pefaco to purchase the entire issued share capital of Betshop. The disposal was expected to be completed, pending shareholder approval, following LNG’s General Meeting on 28 September, however it has since said the possible share purchase agreement and the terms of exclusivity with Pefaco had expired without renewal. “The company is working to see if a solvent solution can be achieved avoiding administration,” a statement read.
The sale follows a suspension in trading of L&G shares on London’s AIM market in May, after the Betshop business was hit by poor sports betting margins arising from the consistent success of the dominant football teams across Europe since the start of the year.
In mid-September this year, when LNG originally said it would sell Betshop to Pefaco, the company said that without the proceeds from the disposal it would need to cease trading by 16 October 2010.
Last week the company’s bankers issued a demand for repayment with LNG currently working to see if a solvent solution can be achieved avoiding administration. LNG said that “further resolutions” will need to be put to shareholders at today’s general meeting if an alternative process emerges.