Sportingbet Sells Operations in Turkey

Online gaming company Sportingbet, has agreed to sell its Turkish operations for $197.6 million. The decision was made just days after negotiations with Ladbrokes fell through. Ladbrokes, another betting group, had been interested in taking over Sportingbet, but decided against doing so, due to their Turkish business. Turkish law has declared online gambling illegal, making Sportingbet’s business dealings there troublesome for buyers.

Selling the Turkish Business

Sportingbet stated that it planned to sell its Turkish business to East Pioneer Corporation which is part of the GVC Sports, another gaming company. The deal is dependant on the approval of the shareholders. The business is currently being run out of the Channel Islands due to the gambling restrictions being imposed in Turkey.

According to Andy McIver, the chief executive officer of Sportingbet, disposing the Turkish operations was part of the company’s end game to make a move into the regulated gambling markets. He said that the company’s other big markets like Greece and Spain have begun to regulate their real money online gambling and Turkey alone stood out. It had often been called an overhang on their equity which led to their decision to sell that side of the business.

Sportingbet entered into negotiations with GVC in July 2011. They said that the $197.6 million would be paid over a period of three years in monthly installments. The first of these is due in January 2023.

The Future of Sportingbet

An analyst at Peel Hunt, Nick Batram, stated that Sportingbet’s equity could end up rising since the political risk tied to operating in Turkey is getting removed. He said that the sale of the Turkish operations is welcome and the price also looks good. The deal will initially be dilutive as far as earnings are concerned but since the company already makes 70% of its profits from regulated markets, there will soon be a big change in the value of the shares.

The shares for Sportingbet rose by 2.85% in London. This is a positive change from the 20% fall in shares after the Ladbrokes deal was called off. Initially, the takeover was stalled because of the Turkish business but later, it emerged that legacy risk was Ladbrokes’ biggest worry.

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