Canadian online gambling operator Intertain Group says it will proceed with plans for a UK stock exchange listing after failing to receive any satisfactory offers to purchase the company.
On Tuesday, Intertain announced that it planned to implement its ‘UK Strategic Initiatives,’ including establishing a new London-headquartered UK corporation that would pursue a listing on the main market of the London Stock Exchange.
Intertain said it had decided to pursue the UK strategy after its strategic review process resulted in the company receiving “preliminary and refined proposals from highly-credible strategic parties” looking to acquire Intertain outright. Intertain said it also received offers to acquire “material business units” of the company.
However, while Intertain said it had held talks with the various parties submitting these offers, “no definitive proposals” had been received. As a result, Intertain’s board said “continuing to operate as a standalone business” under its new UK-based management team “offers a significant opportunity to maximize the potential long-term value” of the company.
As Intertain’s business primarily consists of UK-facing online bingo operations, Intertain believes the UK is “the natural home for its listing.” Intertain believes that the key advantages of this UK strategy “remain substantially unaffected” by the recent uncertainty following the UK’s Brexit vote.
Intertain also believes a UK listing will provide “greater exposure to a large analyst community with extensive sector experience” as well as boosting Intertain’s “profile and status among UK- and European-based investors.”
In other words, Intertain believes its stock is presently undervalued by North American philistines who dare to express concerns over the company’s ability to turn a profit as its enormous debt and earn-out obligations come due.
Intertain said it doesn’t intend to issue any new shares via its UK listing, at least, not initially, “in light of prevailing market conditions.” However, Intertain is “actively exploring its debt financing options” to be able to meet those aforementioned earn-out obligations, which substantially fall due in June 2017.
