Sports betting technology supplier Sportech have announced the discontinuance of plans to sell the business following detailed discussions with a number of suitors.
In a statement, the company said that “these discussions were unlikely to result in an offer for all or a material part of the Group that it would be able to recommend to shareholders”, and confirmed that it had abandoned all talks with interested parties.
Sportech commenced a full scale strategic review of its business in September 2017, following this the company concluded: “Sportech has significant potential for long-term value creation through: growing its core businesses; diversification; and benefitting from the possible liberalisation of sports betting in a number of states in the US.”
Addressing the move to stop takeover proceedings, Richard McGuire, Non-Executive Chairman of Sportech, commented: "The Board and senior management invested considerable time in diligently managing the Formal Sale Process. Whilst a sale of the Company might have delivered an immediate further return to shareholders, in addition to the £75m returned last year.
“I am confident that the Company has the potential to deliver significant long-term value to shareholders, especially if the US sports betting market is liberalised and also from further diversification strategies. We are focused on ensuring Sportech benefits fully from any changes in the US sports betting market and we anticipate announcing exciting new initiatives in due course.”
At the same time, Sportech have announced the appointment of Andrew Gaughan as Chief Executive Officer. Gaughan first joined Sportech in 2010 following the acquisition of Scientific Games Racing, and was appointed to the Board in January 2017.
He has more than 25 years' experience in the gaming, technology and horseracing industry having served in senior positions with other international gaming companies.
The termination of the formal sales process caused a 56% drop in the company’s share price at the start of trading on Wednesday, with shares in Sportech trading at 35.00.
Despite the fall, McGuire remained bullish, adding: "We have a strong balance sheet, professional management, dedicated staff and industry leading products being delivered to supportive clients across 37 countries. I welcome Andrew Gaughan to the role of Chief Executive Officer as part of a new leadership team to ensure we execute on our commitment to deliver tangible returns to shareholders."