October 1, 2012 3:28 pm

Sportingbet rejects joint offer

Sportingbet has rejected a joint offer from William Hill and GVC for the online gambling company, saying it “significantly undervalues the business and its future prospects”.

The indicative offer is of 52.5p, made up of 45p in cash from William Hill and 7.5p in GVC shares. That represents a 2 per cent premium on Sportingbet’s closing share price on Friday, and values the company at £350.2m.

The offer partners have until October 16 to firm up their offer. The day before the announcement of their interest in the gambling operator on September 19, Sportingbet shares were worth 43.75p.

William Hill wants Sportingbet’s regulated assets in Australia and Spain, and sees the partnership with GVC as a way of offloading the unrelated assets, something that rival Ladbrokes could not resolve when it looked at the operator last year.

GVC, based in the Isle of Man, bought Sportingbet’s unregulated Turkish business last year for €142.5m.

Ivor Jones, Numis analyst, last week said the potential synergies and the growth potential of Sportingbet’s Australian business were strong enough to merit shareholders holding out for 90p a share.

Nick Batram of Peel Hunt said Sportingbet’s valuation could be as high as 73p a share, or £637m, but that 63p a share was “a reasonable expectation”.

Analysts see Paddy Power as a potential counter-bidder, given its established position in the Australian market.

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