UPDATE 2-Greece kicks off privatisations with $860 mln OPAP sale

Wed May 1, 2013 12:55pm EDT

* Greece sells controlling stake in gambling firm OPAP

* Buyer, Czech-Greek fund Emma Delta, to pay 652 mln euros

* Price is at a discount to market value (Adds completion of deal, comments by privatisation agency, analyst)

By Angeliki Koutantou and Harry Papachristou

ATHENS, May 1 (Reuters) - Greece has secured the first of the privatisation deals required under its international bailout, with the sale of its 33 percent stake in betting firm OPAP to a Greek-Czech investment fund.

The Emma Delta fund will pay 652 million euros ($860 million) for the stake plus management rights in the company, privatisation agency HRADF said in a statement on Wednesday.

Athens' total receipts from the sale will rise to 712 million euros after it gets 60 million euros in dividends that the state retains under the terms of the deal.

But the overall price the sale fetched was still below the company's market value, highlighting the challenge Athens faces in trying to meet its ambitious privatisation targets.

OPAP, which has monopoly rights for sports betting until 2020 and lottery operating rights until 2030, used to be Greece's most profitable company.

The 33 percent stake had a market value of 745 million euros based on OPAP's share price of 7.08 euros on April 22, when Emma Delta, the sole bidder, submitted its initial offer.

Emma Delta is controlled by Czech investor Jiri Smejc, who specialises in emerging markets, and George Melisanidis, the son of well-known Greek shipping tycoon Dimitris Melisanidis.

Smejc, 42, has investments in Russia, China and South-East Asia. Other fund investors include Greek entrepreneur Christos Copelouzos, Russian investment firm ICT Group and Czech-based investment fund KKCG.

Better-known prospective buyers for the OPAP stake dropped out before the final bidding last month, including German gaming equipment firm Gauselmann, gaming software group Playtech, private equity firm BC Capital and Chinese conglomerate Fosun.

But HRADF said the sale price was good, at almost 19 times the company's expected 2013 profit.

"The price was outstanding," the agency's chief executive Yannis Emiris told Reuters. "It gives us a huge boost for the privatisations to follow," he added.

OPAP's shares last traded on Tuesday at 7.49 euros, a multiple of 16.64 times the average market forecast for earnings this year of 0.45 euros, according to Thomson Reuters data.

OPAP used to be Greece's most profitable company with net income exceeding 500 million euros last year. But this will change after the cash-strapped government slapped a 30 percent tax on gross gaming revenues from January this year.

On top of that, the company's expansion plans in electronic and online games and video lotteries might come to nothing if competitors such as William Hill and Stanley Bet succeed in a court challenge to its sports betting and lottery monopoly rights.

"The discount reflects the country risk and the challenges regarding OPAP's monopoly and the roll-out of the videolotteries," said Eurobank Equities analyst Stamatis Draziotis.

"PARODY SALE"

Emma Delta initially offered 622 million but Athens gave it until Wednesday to improve its offer to at least 650 million as it sought to keep the sale process on track. The extra 30 million euros offered will be paid in tranches, HRADF said.

"Emma Delta knew they were the sole bidders and that the privatisation had to succeed, so there was no reason for them to offer more than that," Draziotis added.

Greece's main opposition party Syriza called the privatisation a sell-out.

"This tender is a parody. It ended up as a humiliating offer by one bidder and shows that state property is not being sold but is given away for free," Syriza said in a statement.

Athens needed to wrap up the sale to show it is finally making good on long-promised efforts to sell off state assets and cut its debt as demanded by its European Union/International Monetary Fund bailout.

"Our expectations may not have been met in full but it's nevertheless an important success because it is the first major privatisation and paves the way for the others", an official close to the government told Reuters.

If Greece had failed to sell OPAP it would have already missed its asset sale target of 2.6 billion euros ($3.4 billion) this year - a shortfall it would have to meet with additional austerity measures or more money from its international creditors.

Greece might still miss the target if it settles for less than expected in its next big privatisation sale due later this month, of gas utility DEPA.

The DEPA sale has failed to attract major western energy companies, leaving Russia's Gazprom as the sole front-runner. ($1=0.7585 euros) (Editing by Greg Mahlich)

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