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Sportech easier to swallow after pools sale
A streamlined Sportech (SPO:AIM) could be a takeover candidate according to Investec analyst Alistair Ross.
Shareholders in the betting services provider approved the £83m sale of its Football Pools operation to private equity firm OPCapita on 19 April and the deal is expected to complete in May.
Any M&A speculation may have to wait until after a ruling from the Supreme Court in July 2017 which will decide if Sportech is owed compound interest after a dispute over VAT with HMRC.
Investec reckons a successful outcome could be worth between £150m and £250m before tax or 81p and 135p per share. The company is already planning a £20m one-off return and there could be more to come assuming the Football Pools deal completes and it wins its case at the Supreme Court.
Funds are also likely to be funnelled into expanding the US gaming business which now represents its core area of focus. This includes the Sportech Racing and Digital betting hardware and software business and Sportech Venues gambling venue operation.
The company has already indicated its intention to pursue bolt-on acquisitions. (TS)