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Betshop sold for peanuts as parent company go down the toilet

Poor website, poor offering and overvalued - no surprises that Betshop didn't achieve the €5m asking price as their owners, Leisure & Gaming (LNG), are stone broke and desperate for a sale.

LNG forced into administration and cut price Betshop sale

Embattled Leisure & Gaming (LNG) has been placed into administration with its principal asset, Betshop Group (Europe) Ltd (BSG) sold as a going concern to Honeymead Services for €1m, less than a fifth of the price it had previously agreed with Pefaco earlier this month.


Administration statement

On 12 October 2010 specialist restructuring, recovery and insolvency firm, FRP Advisory LLP ("FRP"), on behalf of the Company, contacted 13 potentially interested parties with a deadline to receive indicative funded offers for BSG by 14 October 2010 with a view to completing both due diligence and a transaction during week commencing 18 October 2010. Separately, five turnaround funds were also contacted. The short timescale to disposal was dictated by the group's critical cash position that required an injection of circa €3m, which included €1.5m as working capital into BSG, €0.5m into the Company to deal with immediate creditors and €1m to the bank who had issued demand for repayment.

Any punter that deals with this amateur firm obviously doesn't understand the concept of value, although their bookies must be beatable...

€450k of sports betting losses were incurred in the week ending 17 October 2010, further compounding the cash position in BSG.

Although this part is just a little curious....

Discussions were held with all parties, one of which was Honeymead Services Limited, a company which is controlled by a syndicate of investors including Gabriel Chaleplis, a director of BSG. Through that process, Honeymead Services Limited increased their initial offer to €1m payable as to €500k on completion and €500k deferred over 12 months. At the same time, the remaining interested parties withdrew from the bidding process.

A director of Betshop, which happened to lose a huge chunk of its value due to severe trading losses in the week before the sale, is part of the purchasing syndicate. Could be perfectly legitimate, but just smells a little bit fishy if you ask me...

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