UPDATE 1-Greece's OPAP gets shareholder approval for disputed IT deal

Sat Apr 6, 2013 12:59pm EDT

(Adds data and comment from potential suitor)

By Angeliki Koutantou

ATHENS, April 6 (Reuters) - Greece's betting monopoly OPAP said it won shareholder approval on Saturday for a disputed IT services contract with Intralot, a move that could complicate the sale of the country's stake in the gambling firm.

Greece's privatisation agency, HRADF, is selling all but 1 percent of the government's 34 percent stake in OPAP as part of Greece's efforts to raise 2.6 billion euros in privatisation proceeds this year.

The OPAP sale, along with the privatisation of Greece's natural gas distributor DEPA, is among the biggest sales Greece is expected to conclude as part of an EU/IMF bailout.

But two of the seven potential suitors for the OPAP sale - a bid vehicle called Emma Delta backed by Greek shipping tycoon George Melisanidis and Czech investor Jiri Smejc, and a consortium led by gaming equipment company Gauselmann and gaming software group Playtech - have threatened legal action if the contract for a new central hardware and software system was approved.

They say that the contract would involve OPAP paying more than it had stated and that the buyer of the government's stake would be bound to it for five years without any say. Both would-be buyers have called on OPAP and HRADF not to formalize the contract.

But OPAP shareholders who attended the meeting on Saturday voted in favour of the Intralot deal, the company said in a bourse filing. Investors representing 37.9 percent of OPAP's outstanding shares voted, with 71 percent of them approving the contract while less than 1 percent voted against it.

HRADF did not take a position on the contract and cast a blank ballot at the meeting, saying that it was up to OPAP's management to decide on the deal.

"HRADF is not, in any case, in a position to evaluate the terms of the deal," it said in a statement read out to shareholders. "The approval of these terms is an issue for OPAP's management, which has the specific knowledge of the respective technical and economic parameters."

"For these reasons, HRADF is attending (the meeting) but is not voting in favour or against."

Some small shareholders criticised HRADF's neutral stance, while others complained about the cost of the deal.

After the contract was approved, one potential suitor who declined to be named told Reuters that they planned to take "strong legal action" against OPAP management.

OPAP's chairman Constantinos Louropoulos reiterated that the cost of the renewed contract would be about 36 percent lower than the previous deal and that this was close to what other European peers were paying for technology.

"The investment is around 1.25-1.26 percent of the company's total revenues," he told shareholders. "So this number is considered pretty competitive in the sense that that's what we are seeing in several other lotteries."

Intralot, one of the world's biggest gaming software providers, has been OPAP's IT contractor since at least 2001, when OPAP was listed on the Athens bourse.

Its latest contract expires in July and OPAP considers its renewal, which it said would cost 109 million euros for services and capital expenditure plus at least 46 million euros for terminals maintenance, as vital for its uninterrupted operation.

The shareholder meeting, initially scheduled for March 26, was postponed to April 6 to give OPAP's biggest shareholder, HRADF, more time to study the agenda.

OPAP, in which big U.S. hedge and investment funds including Baupost Group own a stake, holds a national monopoly on sports gambling until 2020 and on lotteries until 2030. The company, with annual sales of about 4 billion euros, also has the exclusive licence to launch video lotto terminals in Greece.

(Additional reporting by Nikolas Leontopoulos; Editing by Susan Fenton)

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