LNG Leisure&Gaming

 

TIDMLNG 
 
RNS Number : 0995V 
Leisure & Gaming plc 
27 October 2010 
 
27 October 2010 
For immediate release 
                              Leisure & Gaming plc 
                                ("the Company") 
  Administration of the Company and the sale of Betshop Group (Europe) Limited 
Since the suspension of trading in the shares of the Company on 21 May 2010, the 
Directors continued to have discussions with their shareholders and received 
interest from nine potential purchasers for the shares held by the Company in 
Betshop Group (Europe) Limited ("BSG").  As a result of this sales process, the 
Company received one firm offer from Grupo Pefaco ("Pefaco"), a Spanish company 
with operations in Europe, South America and Africa involved in recreational 
gaming machines.  Heads of terms were signed with Pefaco on 28 July 2010 and the 
offer was detailed in a circular to shareholders dated 10 September 2010 and 
comprised an initial consideration of EUR2.3m payable on signing the Sale and 
Purchase Agreement ("SPA"), repayment of the intercompany account due from BSG 
of EUR1.1m and deferred consideration of up to EUR3m subject to meeting certain 
turnover targets commencing on 1 August 2010. 
 
The Pefaco offer was put to shareholders at a meeting held on 28 September 2010 
however that meeting was adjourned before voting took place to allow time for 
the SPA to be concluded.  Under the timeline set out in the heads of terms with 
Pefaco, the sale was due to be completed on 29 September 2010 and shareholders 
were concerned that an SPA was not concluded.  The Company did not conclude 
terms with Pefaco and Pefaco withdrew their offer prior to the adjourned 
shareholders meeting held on the 12 October 2010. 
 
The loss of the sale to Pefaco was announced to the stock exchange on the 11 and 
12 October 2010, as well as being widely covered in the gaming industry press. 
 
On 12 October 2010 specialist restructuring, recovery and insolvency firm, FRP 
Advisory LLP ("FRP"), on behalf of the Company, contacted 13 potentially 
interested parties with a deadline to receive indicative funded offers for BSG 
by 14 October 2010 with a view to completing both due diligence and a 
transaction during week commencing 18 October 2010.  Separately, five turnaround 
funds were also contacted. The short timescale to disposal was dictated by the 
group's critical cash position that required an injection of circa EUR3m, which 
included EUR1.5m as working capital into BSG, EUR0.5m into the Company to deal with 
immediate creditors and EUR1m to the bank who had issued demand for repayment. 
EUR450k of sports betting losses were incurred in the week ending 17 October 2010, 
further compounding the cash position in BSG. 
 
Four offers were received for the shares in BSG including the acquisition of the 
intercompany loan which at today's date is EUR0.9m due from BSG to the Company. 
This included a materially reduced offer by Pefaco and interest from a 
significant international gaming operator. 
 
Discussions were held with all parties, one of which was Honeymead Services 
Limited, a company which is controlled by a syndicate of investors including 
Gabriel Chaleplis, a director of BSG. Through that process, Honeymead Services 
Limited increased their initial offer to EUR1m payable as to EUR500k on completion 
and EUR500k deferred over 12 months. At the same time, the remaining interested 
parties withdrew from the bidding process. 
 
In view of the insolvent position of the Company, the directors placed the 
Company into Administration on 26 October 2010 at 4.36pm and the Joint 
Administrators, Philip Watkins and Geoff Rowley of FRP Advisory LLP, entered 
into a share purchase agreement in respect of the sale of the entire 
shareholding of BSG, including the  acquisition by Honeymead Services Limited of 
the intercompany loan due from BSG which at today's date is EUR0.9m to the 
Company, for EUR1m. In accordance with the terms of the  share purchase agreement 
the initial consideration was EUR500k with deferred consideration payable in four 
EUR125k payments over 12 months.  The Joint Administrators have retained security 
over the BSG shares and debenture security over the UK entities in the BSG group 
as security for the deferred consideration. 
 
The Joint Administrators were able to facilitate the sale of BSG as a going 
concern, thereby preserving the business and protecting the jobs of over 600 
agents and employees in Italy, Greece,  Cyprus and the UK. 
 
For further information, please contact: 
 
FRP Advisory LLP                        Philip Watkins and Geoff Rowley - Tel: 
0207 467 4005 
Georgina Swain, FRP Advisory Press Office - Tel: 0207 467 4297 
 
FinnCap                                     Geoff Nash and Charlotte Stranner 
(Corporate Finance) - Tel: 020 7600 1658 
 
 
 
 
About FRP Advisory LLP 
 
FRP Advisory LLP is a specialist restructuring, recovery and advisory firm that 
offers commercial & asset finance, corporate insolvency, restructuring, 
independent business reviews, interim management & placement services, personal 
insolvency & advisory, creditor services, insolvency investigation services and 
banking live-side support. With 28 partners and 200 staff, FRP Advisory is one 
of the largest restructuring, recovery and insolvency firms in the UK, operating 
from 9 regions including: East Midlands, Eastern Region, Kent, London, North 
East, North West, St Albans, Sussex and West Midlands. To find out more, visit 
www.frpadvisory.com 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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