Gigamedia Purchase Complete

5/13/10 – In an announcement this week, the Taiwan-based Gigamedia Ltd updated the market, confirming that French internet gambling group Mangas Gaming has completed its purchase of 60 percent of the Gigamedia online gambling operations.

The sale has immediate effect, and Gigamedia expects to record a significant one-time gain in the second quarter as a result of the transaction.
 
Mangas Gaming is jointly owned by the Lov Group of the highly successful French media entrepeneur Stephane Courbit in partnership with the Societe des Bains de Mer de Monaco, controlled by the Principality of Monaco. SBM is the owner of the Monte Carlo Casino in Monaco.
 
Mangas has made initial cash payment of $100 million, which will be followed by a final earn-out payment to be made after the May 2012 valuation, depending upon the fair market value of the business at that time.
 
Gigamedia will continue to hold the remaining 40 percent interest with a put option to sell all or part to Mangas beginning 2013. Beginning 2015, Mangas will have a call option on any remaining shareholding held by Gigamedia. For both GigaMedia's put option and Mangas's call option, the price will be determined based upon fair market value at the respective points in time.
 
Gigamedia posted group preliminary first-quarter 2010 financial results, with revenues of $37.1 million, down approximately 8 percent quarter-over- quarter, largely attributable to business transition and integration issues related to the Mangas deal.