Lottery and betting technology company, Sportech, has revealed it is in exclusive discussions to sell its terrestrial lottery supply contract to maximise its return to shareholders through dividends.
The firm’s current contracts last until 2025 and generated an EBITDA of $3.93m in FY19 which was the last full year in which the company’s trading was not impacted by COVID-19.
The potential fee could see the lottery supply contracts sold for $14m-$15m and the exclusivity period granted to the potential buyer is due to expire on 16 September 2021 unless extended by mutual agreement.
The proposed sale falls in line with Sportech’s strategy of pursuing corporate transactions which maximise shareholder value.
In a statement, Sportech said: “Given the change in size of the group, the group now has funds surplus to its current operational requirements and the board believes that now is an appropriate time to return through the tender offer up to approximately £35.5m of cash to its shareholders.”
The sale comes amid the announcement of a tender offer and capital reduction which has seen shares valued at 40p each. The tender offer limits the number of shares buyable at 88,751,257 ordinary shares representing 47.02%. The company claims this will help them pursue further interests in the lottery industry.
The statement added: “The board is satisfied that, following the capital reduction and the tender offer and assuming the tender offer is fully subscribed, the company will remain an attractive size with sufficient liquidity to pursue the strategies of the venues and lottery businesses.
“The board believes that these proposals are in the interests of all shareholders.”
