Emma Delta to acquire 33% stake in OPAP
Improved offer from sole-bidder amounts to 712m after year-long tender process
The Greek privatisation agency has agreed to sell the government’s 33% stake in gambling monopoly OPAP for 652m to Emma Delta.
The Greek and Czech-backed fund was asked on 17 April to submit an improved final offer, adding an extra 30m to the price in additional payments. The total financial consideration, including a 2012 dividend of 60m corresponding to Hellenic Republic Asset Development Fund’s (HRADF) stake in OPAP, amounts to 712m or 18.6 times the estimated net profits of OPAP’s 2013 financial year.
Greece has been under pressure to raise almost 10bn from asset sales by 2016 as part of an international bailout plan. Analysts had previously valued the government’s stake at close to 1bn given the operator’s market dominance and proposed plans to enter other regulated markets and diversify its offering into online gaming in the near future.
However OPAP, which exclusively operates and manages lottery and sports betting games in Greece, suffered a tough 2012 with less-than-impressive financial results and significant tax changes by the Greek government wiping almost a fifth off its share price in September. Stamatis Draziotis, an analyst at Eurobank, said the final fee reflects “the many risks involved in investing in Greek assets”.
“This price leaves potential for the investors see return on their investment and to take on the risks involved in Greek assets. It values OPAP at around 5.3x [projected] 2014 EBITDA which represents some discount,” Draziotis said.
He added that further discount was likely agreed due to the uncertainty of the success of the new OPAP-owned VLT machines being launched across the country, as well as a lack of legal clarity over the operator’s monopolistic position. Its move into the online gaming space got underway last year, with talks with chosen joint venture partner GTECH G2 currently in progress.
Previous interested parties in the government’s 33% stake included a consortium involving Playtech and its German JV partner Gauselmann, and Fosun International, a Chinese business conglomerate with interests in and pharmaceuticals, property, steel, and mining.
Emma Delta is a fund advised by Emma Delta Management which is beneficially owned by asset manager Jiri Å mejc (66.7%) and Greek business magnate George Melisanidis (33.3%). Å mejc is CEO of consumer finance company Home Credit Group and serves as head of asset management at PPF Group, one of the largest investment and finance groups in Central and Eastern Europe.
Melisanidis is a Greek business magnate and founder and president of Aegean Marine Petroleum, the second largest oil company in Greece, and ranked on the Forbes list of the world’s 500 richest people.