The Australian online gambling scene lit up last week as news emerged of a A$18.6 million hostile takeover attempt by Centrebet on International All Sports group. If successful the attempt would make Centrebet one of the largest corporate bookmakers in Australia.
The cash offer will increase to A$29.91 million if Centrebet manages to acquire more than 90 percent of the issued share capital of IAS.
Centrebet’s chairman, Graham Kelly, corresponded with IAS shareholders last week, describing his company's offer as “…an extremely attractive opportunity” and characterising IAS as "…a poorly performing company”.
His letter offered the opinion that would have difficulty in achieving profitability and rewards for its shareholders in the face of aggressive competition from larger domestic and international online wagering companies, the adverse impact of the introduction of product fees in Australia and prevailing economic conditions.
IAS shares initially surged up over 87 percent on news of the takeover attempt, but the board of IAS responded by calling on shareholders not to take any action, informing them that it had refused Centrebet’s request to release it from the confidentiality and standstill obligations it had entered into previously when Centrebet lodged a bid for its IASBet Australian bookmaking arm.
The strong performance of the company’s IASBet operation relative to its loss-making CanBet non-Australian operation is thought to be behind the directors’ stated belief that the proposal “significantly undervalues the shares of IAS.” While CanBet’s A$8 million loss for the year to June 2008 dragged the company to an overall loss of A$3.8 million, IASBet posted a 21.3 percent growth in turnover and a 56.9 percent increase in EBITDA.
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