FRANKFURT (Reuters) - German gambling company Zeal Network’s TIMGn.DE shareholders paved the way for the takeover of rival Lotto24 (LO24n.DE) by voting in favor of a capital increase as well as other preconditions.
Zeal said on Friday that it expects the acceptance period for its offer to start by the end of January 2019.
Germany’s antitrust regulator has already approved the deal and Zeal has already secured irrevocable undertakings from shareholders representing 65 percent of the shares — above the 50 percent minimum acceptance threshold.
Rival Lottoland had tried to scupper the deal and said it was ready to offer up to 76 million euros ($87 million) for German lottery business Tipp24 in a move which could have thwarted the restructuring plans of Tipp24’s owner Zeal.
In Germany, official lottery tickets are sold on behalf of the state through authorized distributors locally or online, while so-called ‘secondary’ lotteries such as Tipp24 bet on the state lottery numbers but are actually unregulated.
After German authorities announced plans to tighten oversight of the secondary sector, Zeal decided to pull out of that business, a person familiar with the matter said.
Zeal wants to switch its business model from a secondary lottery to the legal distribution of state lottery tickets. The company wants to keep the well-known Tipp24 brand and through it sell official lottery tickets, the source said.
As part of that plan, it made the offer to buy Lotto24 AG, a former subsidiary that already sells official lottery tickets.
At Zeal’s shareholder meeting, 60 percent voted in favor of the required capital increase, while 51 backed a waiver on Guenther group - which will own more than 30 percent of the combined group after completion.
Reporting by Arno Schuetze, editing by Louise Heavens