The company is buying three Jasmine bingo clubs for pounds 600,000 from the Leisure Workshop, where former Rank director Leslie Hunt is chief executive and ultimate shareholder. Mr Hunt will join the Zetters board as deputy chief executive on completion of the deal and will become chief executive in April when Jim Clarke, the current incumbent, retires.
Robert Upsdell, non-executive chairman of Jasmine, will also join Zetters as a non-executive director. He is likely to be appointed deputy chairman when Paul Zetter, the chairman, gives up his executive duties next year.
Zetters denied the deal amounted to a reverse takeover of the company by Jasmine, though finance director Terry Yardley admitted the terms had attracted the Stock Exchange's attention. "There are elements of reverse takeover about the deal but not in financial terms."
The deal, which is being funded by the issue of 500,000 ordinary Zetters' shares, means Jasmine will end up speaking for 7 per cent of the enlarged share capital. The Zetters family will see its stake diluted to 41 per cent. Zetters is also paying pounds 5.9m to Leisure Workshop on completion of the deal to satisfy inter-company debts due to Jasmine.
Zetters, the smallest of the big three pools companies with a market share of 3 per cent, was at the centre of a senior management shake-out in March which saw joint managing director Stephen Easterman became the third director to leave the company in less than a month. He followed fellow managing director Alan Bloom and marketing director Alan Blacher through the revolving door.
No reason was given for the departures, though Zetters has suffered along with other pools companies since the introduction of the National Lottery.
In the year to March 1996 pre-tax profits fell to pounds 1.02m from pounds 1.26m on reduced sales of pounds 19.7m (pounds 23.3m). Earnings per share slipped to 10.1p from 12.8p though the interim dividend of 5p was maintained.
The adverse impact of the National Lottery has forced Zetters to target other sectors of the gaming industry and bingo is one area where it has plenty of recent experience. In 1987 it demerged a chain of 30 bingo clubs to form a quoted company, Zetters leisure, which were bought a year later by Bass.
Jasmine was formed in 1991 to buy eight bingo clubs from Rank following the leisure giant's takeover of Mecca.Reuse content