- Lottoland Holdings wants to acquire Zeal’s Germany-facing business
- The company wants to also buy out Lotto24 to guarantee better synergies and tax conditions
- Zeal and Lottoland have been less diplomatic in recent months
Lottoland Holdings has been eyeing a German expansion for a long while now. Facing local opposition, the company continues to eye one particular operator, Zeal Network’s core German business.
Lottoland Holdings Goes After Tipp24.com
On January 11, Lottoland Holdings officially announced that it had signed a bid to acquire one of Zeal’s core businesses. CEO Nigel Birrell has signed an acquisition bid for the German-focused operations of Zeal, Tipp24.com.
Lottoland, though doesn’t just want to focus on the German market, looking as well to acquire the UK-branch of Tipp24 , although the company would not insist on buying out MyLotto24, reports state.
Lottoland has been working with corporate and intelligence partners, which have helped the company make a bid for anything between $68 (EUR60m) million and $87 million (EUR76m), with the estimated market value at $43 million.
The company is also offering a better value to Zeal shareholders compared to the November 2018 filing by Zeal. With 4% in the company, Lottoland is still a minnow when it comes to dictating the daily order of things, but this may be about to change.
Lottoland has also requested from the Board of Directors at Zeal to call off the Extraordinary General Meeting due to take place next week, giving enough time to shareholders to look into the proposition made by the company.
The company also cited its concerns about Lotto24 as a brand. Should Zeal pushes ahead with a sell, it will most likely destroy the value of the company, without adding any strategic or economic advantage, Lottoland position’s reads.
Lottoland Acquisition Will Boost Lotto24’s Prospects
Conversely, if Zeal agrees to sell the brand to Lottoland, this will entail benefits, such as cost synergies, improved growth potential, regulatory breaks, as well as avoid incurring superior operational tax. The exact statement by Lottoland read as such:
By divesting itself of the German lottery betting business, the company is reducing its operational, tax and regulatory risks in much the same way as through the transaction.
Lottoland did cite other advantages of seeking closer ties with the brand and in fact buying it out, explaining that this would reduce the volatility caused by big wins as well as quell fears about German VAT.
There has been a marked low-point in the relations between Lottoland and Zeal, although Mr. Birrell addressed a letter directly to Zeal executives Helmut Becker and Jonas Mattsson, outlining the benefits of seeing the acquisition of Lotto24 as strategically and business-important decision.
Zeal also has reasons to pursue Lotto24 as it estimates that the acquisition would bring in billings with estimated $500 million of international value. Lotto24 managed to rake in as much as $27 million in 2017 in revenue. In 2019, the brand expects to see its billings grow between 38% and 43%.