Paddy Power’s Sportsbet to Acquire IAS

[dave nz]

Australia’s largest corporate Bookmaker.com/?cmpid=4437" target="_blank">Bookmaker, Sportsbet Pty Limited, in which Paddy Power last month acquired a controlling interest, has agreed to acquire International All Sports Limited, the company which was the target of a failed takeover attempt earlier this year by rival Centrebet.



Following the sale of its international online gaming business Canbet last month (more), International All Sports (IAS), in which Sportbet holds an existing 19.98% shareholding, offers bookmaking on racing and sports to Australian customers through internet and telephone channels.



According to a stock market announcement this morning from Paddy Power plc, the acquisition has the unanimous support of the directors of IAS and will be implemented via a Scheme of Arrangement.



Subject to the approval of IAS's shareholders and the Supreme Court of Victoria, the acquisition is expected to be completed in October 2009.



The deal values the entire issued share capital of IAS at AUD$40 million (€22.4 million), and will be funded by Paddy Power and Sportsbet's existing shareholders, who have agreed to subscribe for new equity in Sportsbet to the extent required to fund the acquisition. Paddy Power’s total liability in the acquisition will amount to AUD$16.3 million (€9.1 million), relating to its 51% shareholding in Sportsbet.



The transaction value of AUD$0.60 per IAS share represents a premium on the Volume Weighted Average Price (VWAP) of IAS shares over the last thirty trading days of 30% and a premium of 231% on the VWAP of IAS shares over the last thirty trading days preceding Centrebet’s announcement of an intention to make a takeover offer on 2 February 2009.



Paddy Power said that in view of the acquisition, it has agreed to certain amendments with Sportsbet's existing shareholders to the future financial performance thresholds which were established at the time of Paddy Power's 51% acquisition of Sportsbet (more).



"Mark Read (IAS founder) and his family have built an excellent Australian business which complements Sportsbet and their combination creates by some distance the largest corporate bookmaking business in Australia,” said Patrick Kennedy, Chief Executive of Paddy Power.



The new Chief Executive of the combined business will be Sportsbet’s current CEO, Matt Tripp.



Shares of Paddy Power plc (Co. Profile) (LSE:PAP) will commence trading this morning in London at €17.11 per share.