{"id":5028,"date":"2024-03-19T14:36:30","date_gmt":"2024-03-19T14:36:30","guid":{"rendered":"https:\/\/sbceurasia.com\/en\/?p=5028"},"modified":"2024-03-19T14:36:34","modified_gmt":"2024-03-19T14:36:34","slug":"entain-assumes-betcity-nl-to-be-e68m-to-e156m-below-deal-value","status":"publish","type":"post","link":"https:\/\/sbceurasia.com\/en\/2024\/03\/19\/entain-assumes-betcity-nl-to-be-e68m-to-e156m-below-deal-value\/","title":{"rendered":"Entain Assumes BetCity.nl to Be \u20ac68m-to-\u20ac156m Below Deal Value"},"content":{"rendered":"\n<p><strong>Entain Plc<\/strong> has disclosed additional information related to its legal challenge against <strong>Sports Entertainment Media BV<\/strong> and related parties involved in the valuation of its Netherlands subsidiary, <strong>BetCity.nl.<\/strong><\/p>\n\n\n\n<p>Documents published by the <strong>High Court of England and Wales<\/strong> detail that the board of the FTSE100 gambling group deems the value of BetCity.nl as being \u20ac68m-to-\u20ac156m less than its agreed deal with Sports Entertainment BV.<\/p>\n\n\n\n<p>Entain, which has accused Sports Entertainment BV and the company founders, the <strong>Singels family,<\/strong> of concealing information related to regulatory infringements at BetCity.nl, is pursuing a legal challenge.<\/p>\n\n\n\n<p>In 2022, Entain agreed terms to acquire BetEnt BV, the Dutch KOA licensed operator of BetCity.nl, for a valuation of \u20ac850m. The initial deal terms resulted in Entain acquiring the shareholding of Sports Entertainment Media BV for a cash offer of \u20ac300m.<\/p>\n\n\n\n<p>Entain\u2019s deal included performance reward incentives of \u20ac550m, which would elevate its M&amp;A offer to above the \u20ac800m mark, contingent on BetCity.nl generating 10x EBITDA for the financial year 2023.<\/p>\n\n\n\n<p>However, in 2023, BetCity.nl was fined \u20ac3m for significant failures to comply with the Netherlands Money Laundering and Terrorism Financing Prevention Act (Wwft) \u2013 infringements which Entain cites as having been concealed by Sports Entertainment Media BV and associated parties.<\/p>\n\n\n\n<p>Entain justified the premium on BetCity, stating that it had acquired a podium-placed operator within the newly regulated Dutch online gambling market, following the approval of the Netherlands\u2019 Remote Gambling Act (KOA Act) in October 2021..<\/p>\n\n\n\n<p>Represented by <strong>Clifford Chance,<\/strong> Entain provided an initial estimate of damages caused by the former owners\u2019 breached deal covenants to be in the range of \u20ac68m-to-\u20ac156m.<\/p>\n\n\n\n<p>As detailed by<a href=\"https:\/\/www.documentcloud.org\/documents\/24484835-cl-2023-000850-claimants-supplemental-response-to-request-for-information\"> the document<\/a>: \u201cWithout prejudice to the matters set out above, the Claimant\u2019s most recent good faith calculation is that the damage it has suffered from the Defendants\u2019 breach of warranty totals between \u20ac68 million and \u20ac156 million, though as set out below, an alternative assessment method produces a range of potential losses of \u20ac58 million to \u20ac124 million. This is the case whether the Claimant\u2019s loss is assessed at the date of the SPA, or at the date of Completion.\u201d<\/p>\n\n\n\n<p>Entain has provided two calculations to estimate the damages from Sports Entertainment Media BV breaching deal covenants. Assuming increased risks due to violations, Entain details an estimated reduction in BetCity.nl\u2019s value by \u20ac124m based on an increased Weighted Average Cost of Capital (WACC) from 10% to 12.5%.<\/p>\n\n\n\n<p>The second calculation is based on the adjusted future cash flows of BetCity.nl, wherein Entain presumes that 2024 revenue will be between 28-32% lower than expected. Consequently, this downturn will result in an asset value decrease of \u20ac136 million to \u20ac156 million, which Entain has cautiously adjusted to between \u20ac68m and \u20ac156m.<\/p>\n\n\n\n<p>For both calculations, Entain assumes that BetCity.nl\u2019s performance will be negatively impacted by stricter supervision and loss of reputation.<\/p>\n\n\n\n<p>As detailed to investors, Entain has allocated \u00a340m for compliance costs in its H1 2024 accounts to address upcoming regulatory changes in the UK and the Netherlands.<\/p>\n\n\n\n<p>Don\u2019t forget to subscribe to our <a href=\"https:\/\/t.me\/sbceurasia\">Telegram channel<\/a>!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Entain Plc has disclosed additional information related to its legal challenge against Sports Entertainment Media BV and related parties involved in the valuation of its Netherlands subsidiary, BetCity.nl. Documents published by the High Court of England and Wales detail that the board of the FTSE100 gambling group deems the value of BetCity.nl as being \u20ac68m-to-\u20ac156m [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":5029,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[21,5,1],"tags":[1014,324,1046,6722,7704,7705,205,6712,7706,6888,6719],"class_list":["post-5028","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-features","category-gambling","category-news","tag-betcity-nl","tag-entain","tag-ftse100","tag-gambling-group","tag-high-court-of-england-and-wales","tag-legal-challenge","tag-netherlands","tag-singels-family","tag-sports-entertainment-bv","tag-sports-entertainment-media-bv","tag-valuation"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Entain Assumes BetCity.nl to Be \u20ac68m-to-\u20ac156m Below Deal Value - SBC EURASIA EN<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/sbceurasia.com\/en\/2024\/03\/19\/entain-assumes-betcity-nl-to-be-e68m-to-e156m-below-deal-value\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Entain Assumes BetCity.nl to Be \u20ac68m-to-\u20ac156m Below Deal Value - SBC EURASIA EN\" \/>\n<meta property=\"og:description\" content=\"Entain Plc has disclosed additional information related to its legal challenge against Sports Entertainment Media BV and related parties involved in the valuation of its Netherlands subsidiary, BetCity.nl. 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