Recommended Cash Offer From Rank Group
Edison | Jun 04, 2019 07:27AM ET
Rank Group PLC (LON:RNK) has made a recommended £115.3m cash offer for Stride Gaming PLC (LON:STRST), which equates to an EV of £93.4m. Using the run-rate H119 EBITDA, the deal is valued at c 7.5x EV/EBITDA. The offer of 151p per share is a 29% premium to the previous day’s closing price. Irrevocable commitments have been received by 61.3% of Stride’s shareholders and completion is anticipated in Q319.
£115.3m cash offer; c 7.5x EV/EBITDA
Following the announcement of a strategic review in February 2019, Stride has confirmed that it has received a recommended £115.3m cash offer from Rank Group. This includes £15.5m net cash at H119, as well as £5.7m cash received post period relating to the sale of QSB. The offer of 151p per share is a 29% premium to the previous day’s closing price and, using the H119 EBITDA run rate, the deal equates to c 7.5x EV/EBITDA. Irrevocable commitments have been received by 61.3% of Stride’s shareholders and completion is anticipated in Q319. Rank has stated that combined net online gaming revenues of c £185m will make it the second largest online bingo provider in the UK, with a 4% market share for UK online gaming.
H119 results reflect sector challenges
Stride has also reported H119 results, with net gaming revenues (NGR) of £39.0m, a 13% decline compared to the previous period. NGR from the proprietary platform declined by 9% to £27.0m, while NGR from the non-proprietary platform declined by 24% to £11.5m. Similar to other gaming operators, revenues have been affected by ongoing regulatory challenges and the requirement to implement social responsibility measures, which specifically includes source of funds checks. Adjusted EBITDA declined by 23% to £6.2m. Excluding cash in assets held for sale (£0.6m), net cash of £15.5m was lower than the £21.6m at FY18, largely due to the payment of a £7.1m fine to the UK regulator.
Get The News You Want
Business description
Stride Gaming is a leading online gaming operator in the UK. It uses proprietary and purchased software to provide online bingo and slot gaming. It was formed in 2012 and only operates in regulated real money gaming markets.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.