Lottoland CEO Nigel Birrell has written an open letter to Zeal Network, outlining his opposition to its planned acquisition of Lotto24, which would create a combined group worth about €500m ($572.3m).
Within the open letter, Birrell questioned Zeal's intent over nine separate points. These include: justifying the price proposed and how it was calculated, its intentions to use the high amounts of cash within the company, its plans within the German market and how the company will make significant cost savings.
Birrell said: "We do not feel the transaction has the best interest of all shareholders in mind. We are convinced more value destruction will come if shareholders do not stop the transaction now. Thus we see ourselves obliged to make this letter public.
"We have conducted extensive outside-in due diligence and are confident on the basis of that information we will make an offer for the purchase of certain assets of the company (the "alternative transaction")."
Zeal CEO, Dr. Helmut Becker, has since responded to Lottoland’s public letter, stating: "We firmly believe, of the alternatives we have considered, our proposal to reunite Zeal and Lotto24 has the strongest strategic rationale, offers the best opportunity for sustainable growth and creates the most value for Zeal’s shareholders.
"Strong opposition from a competing secondary lottery operator is clear and compelling evidence that our transaction is the best way forward for our company and our shareholders."