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UPDATE 2-Greece gives OPAP suitor more time to raise offer
April 25, 2013 / 7:46 AM / 4 years ago

UPDATE 2-Greece gives OPAP suitor more time to raise offer

* Suitor for OPAP stake has until May 1 to improve bid

* Greek-Czech fund offered 622 mln euros for 33 pct stake

* Athens wants at least 650 mln

* Fund had asked for more time to decide on bid-source

By Angeliki Koutantou and Harry Papachristou

ATHENS, April 25 (Reuters) - Greece gave the sole bidder for gambling monopoly OPAP a week extra to raise its terms in a last-ditch attempt to save its first big privatisation from an embarrassing failure that could derail its bailout.

Debt-laden Athens needs to conclude the sale to an investment fund called Emma Delta to kickstart its long-delayed privatisation programme, imposed by its European Union (EU) and International Monetary Fund (IMF) creditors.

If Greece fails to sell OPAP, it will not meet its asset sale target of 2.6 billion euros ($3.4 billion) this year - a shortfall that would have to meet with additional austerity measures or by its international creditors having to stump up more money to bankroll the country.

The OPAP sale drew no interest from big international gaming companies, with analysts citing Greece’s economic problems as well as OPAP’s uncertain growth prospects as the reason.

Emma Delta, controlled by Czech investor Jiri Smejc and Greek ship owner George Melisanidis, on Monday submitted the only valid bid for the 33 percent stake and management rights in OPAP, offering 622 million euros.

Privatisation agency HRADF initially gave the fund 48 hours to raise its bid to at least 650 million euros, but the agency has now extended the deadline to May 1, on the fund’s request.

HRADF’s valuation is based on a minimum as estimated by an external assessor and is a discount to its stock market value, though Deutsche Bank and National Bank, Greece’s main sale advisors, have put the stake’s value at just 610 million.

OPAP shares were up 0.4 percent at 6.91 euros in Athens by 1129 GMT, giving a 33 percent stake a market value of about 725 million euros.


An official close to Emma Delta told Reuters the fund needed more time to decide whether and how it would raise its offer.

“It wasn’t possible to wrap up the ... evaluation and response within a pressing 48-hour timeframe,” the official said on condition of anonymity. “This is a multinational investor group with the respective businessmen dispersed in different parts of the world.”

Some analysts saw the delay as a sign that a deal would likely be reached. “The extension shows that both parties remain engaged in the process,” said analyst Paris Mantzavras at brokerage Pantelakis Securities.

“Given the small valuation gap, it is very likely that they will reach a deal next week,” said Mantzavras, who is rated top for the accuracy of his forecasts for OPAP’s earnings on Thomson Reuters data.

Other investors in the group are Greek entrepreneur Christos Copelouzos, Russian investment firm ICT Group, Czech Republic-based investment fund KKCG and Slovak investment fund J&T Finance.

Out of eight investors which had expressed initial interest for OPAP, only Emma Delta and U.S. hedge fund Third Point submitted binding bids. Third Point was disqualified because it insisted on the right to resell OPAP shares at any time.

Emma Delta had said in a statement on Tuesday its bid was fair and open. It added that OPAP had “internal structural problems, with profitability hampered by a cumbersome corporate structure and tight cashflow, which is forecast to continue for the next two years”.

OPAP was Greece’s most profitable company last year, with net income of 505.5 million euros and a return on equity of 49.2 percent, but this is set to change as the company faces a number of issues.

Greece slapped a 30 percent tax on gross gaming revenue from this year, OPAP’s monopoly is subject to a legal challenge from rivals such William Hill, and OPAP’s planned video-lottery and online betting businesses are subject to regulatory uncertainty.

In addition, the company controversially decided earlier this month to renew an IT deal with its long-standing technology provider Intralot just weeks before its privatisation.

Emma Delta and Gauselmann/Playtech, a German-Israeli group which withdrew from the race, had loudly protested at the Intralot contract renewal.

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