Sportingbet, the online gambling group, has received a £46m takeover approach but is warning shareholders that the deal depends on revising the terms of a big acquisition it made in 2001.
The company delayed its annual results yesterday and admitted for the first time that it was trying to renegotiate the "earn-out" clauses with the founders of the US business Sportsbook, so as to "ensure that Sportingbet has sufficient working capital for its requirements".
The 30p-a-share approach emerged out of rescue funding talks with potential new backers, needed to pay for the £103m cash and shares payments to the Sportsbook founders. The scale of the cash portion of the liability - payable in September - is unclear, but it could be as much as £45m and certainly exceeds the £20m overdraft facility put in place by the company.
The unnamed suitor, which is offering cash, has told Sportingbet that its offer is subject to due diligence and to being able to agree less onerous terms for Sportsbook, but Nigel Payne, Sportingbet's chief executive, said he was confident the founders would not insist on the letter of the contract.
"If they were to turn round and do that they would be shooting themselves in the foot because they own a third of the company," he said.
Financial results for the year to March have been postponed until the "earn out" discussions have been concluded next month, Mr Payne said. Sportingbet shares fell a penny to 27p.
The takeover of Sportingbet would bring down the curtain on its controversial two and a half years on the stock market. Its shares have attracted the high-profile interest of the short-seller Simon Cawkwell,known as Evil Knievel, and earlier this year the company was ordered to repay £1m of allegedly stolen money put on the Australian horses by a haulage company executive.
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