OPAP acquires two Cypriot gaming firms

Lottery and soccer pool operator OPAP yesterday underscored its determination to break into new markets as it unveiled agreements to take majority control of two Cypriot sports betting companies for a total of 20 million euros. The board of directors has approved the two deals, OPAP said in a stock market brief. It said the agreements are «another step in the company’s strategy of selective global expansion.» OPAP, with a 78 percent share of the legal lottery and sports betting market in Greece and 42 percent of the total gaming market, has a contractual agreement with the Cypriot government, valid since the beginning of the year. OPAP will take a 90 percent stake in Cypriot sports betting company Royal Highgate Ltd and in each of its 11 subsidiaries for about 10 million euros. The agreement gives it first option on the remaining 10 percent. Royal Highgate, which is listed on the Cypriot Stock Exchange, operates sports betting games through a network of 80 agents. It posted EBITDA of about 762,000 euros and after-tax net profits of some 238,600 euros last year. Under the second deal, OPAP will acquire a 55 percent stake in Glory Leisure Holdings, owned by listed Glory Worldwide Holdings which operates lottery games in Serbia, Bosnia-Herzegovina, Moldova, Uzbekistan and the Dominican Republic. The acquisition is valued at 10 million euros. Glory Leisure Holdings works through a network of 91 agents. It reported EBITDA of about 1.9 million euros and after-tax net profits of some 1.2 million euros in 2002. Glory Worldwide Holdings, which will maintain a 45 percent share, will be given proportional representation on Glory Leisure’s board. It will also have approval rights over unspecified corporate decisions. The two agreements are subject to a financial and legal audit as well as approval from relevant authorities. The deals are expected to be finalized at the end of October. OPAP said it plans to set up a subsidiary to monitor the two operations. The government is planning to sell up to 24.61 percent of OPAP through a public offering and a private placement with foreign institutional investors next month, bringing its stake down to 51 percent.

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