Zetters plans big acquisition to take on National Lottery

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The Independent Online

Two of Britain's top pools companies yesterday announced radical plans to reinvent themselves as they struggle to compete with the National Lottery.

Two of Britain's top pools companies yesterday announced radical plans to reinvent themselves as they struggle to compete with the National Lottery.

Zetters, the country's third-biggest pools firm after Littlewoods Leisure and Vernon's, said it was close to clinching a "substantial" acquisition which would constitute a reverse takeover. Shares in the company were suspended at 186p ahead of the announcement. On Thursday, the shares jumped 18.5p on speculation of a deal.

Zetters had earlier declared its intention to transform itself into an online betting firm to reduce its exposure to the crumbling pools market. It previously held talks with 365, the ailing internet group, over the formation of an online bookmaker.

But Anthony Wollenberg, Zetters' chairman, yesterday denied that the discussions with 365 had been reignited since breaking down in May. He said the company in question was UK-based, adding that technology would be "pivotal" to the alliance. Mr Wollenberg said he hoped to unveil full details of the transaction "very soon".

Zetters recently reported a 26 per cent fall in full-year profits. Mr Wollenberg, who co-founded City Index, the spread-betting firm, was part of the consortium that bought Zetters from the controlling family in January.

Meanwhile, Littlewoods Leisure unveiled details of its planned £161.8m takeover by Rodime, a shell company backed by the entrepreneur Trevor Hemmings. The deal will see Littlewoods give up its 60-year-old name in favour of the more up-to-date Sportech.

The name change is intended to "reflect the new focus of the company", which has already spent millions of pounds on launching gaming and betting services over the internet and digital TV channels. Rodime will raise about £17m to help fund the transaction through a two-for-three rights issue. Newby Manor, one of Mr Hemmings' vehicles, will subscribe for £11.8m, giving it a 28.4 stake.

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