UK-listed gambling operator Sportech has once again seen its attempt to sell its Football Pools division come to naught.
In September, Sportech announced that it had reached agreement on a £97.25m all-cash deal to sell the Football Pools to Sportingbet founder Mark Blandford’s venture capital firm Burlywood Capital. On Tuesday, Sportech announced that discussions between the two parties regarding the sale “have now terminated.”
Sportech CEO Ian Penrose said the deal had fallen apart because Burlywood was “unable to conclude the transaction set out within their proposal.” Penrose said the Pools business was “a valuable asset which has been transformed following a lengthy modernization program” and Sportech would “continue to focus on maximizing opportunities for the business.”
Burlywood had planned to install former Sportingbet COO Ian Hogg as chairman of a new AIM-listed firm that would run the Pools business. On Tuesday, Hogg posted a note to his LinkedIn page, saying “the IPO market is just too tough in London right now” to ensure the sale’s completion.
Burlywood reportedly planned to finance the acquisition through institutional equity and £30m in debt but Investec analyst Alistair Ross said Burlywood had “failed to raise the necessary funds for the sale to complete.”
This marks Sportech’s second failed effort to sell the Pools business this year. Last December, Sportech was in serious talks with UK interactive television gambling operator NetPlay TV regarding a £100m deal for the Pools but the talks collapsed in January.
The 92-year-old Pools business generated revenue of £33.8m and earnings of £15.2m in 2015. In August, Sportech said its modernization efforts had helped ‘stabilize’ the division’s performance, leading to H1 revenue and earnings of £14m and £7m, respectively.