Gaming Media Group pulls out of Media Corp deal
Media Corp "unable to provide capital structure" required for deal to progress
Gaming Media Group (GMG) has announced it has pulled out of reverse takeover talks with Media Corporation, which itself has moved to acquire betting platform Intabet.
According to a statement from GMG, the company ceased discussions when it became clear that AIM-listed Media Corp was unable to meet various conditions to which the deal was subject.
Should Media Corp have acquired GMG, it would have been deemed a reverse takeover under AIM rules, and therefore subject to shareholder approval.
Crispin Nieboer, CEO of GMG, said: “We have mutually agreed to end our discussions, as Media Corp was not able to provide the corporate and capital structure originally agreed upon in a non-binding Heads.”
Media Corp said in a statement: “This has no bearing on the merits of GMG but rather, as announced previously, the board was also looking at another acquisition which is not a reverse takeover under the AIM Rules and, as such, is considered a preferable deal for the shareholders at this juncture.”
Meanwhile Media Corp chairman Justin Drummond has announced he is to step down following the gaming group’s acquisition of betting platform Intabet for £1.53m, just months after he resigned his post as chief executive to be replaced by Sara Vincent on an interim basis. The deal will see two members of the Intabet’s management team, Phil Jackson and Adam Fraser-Harris, join Media Corp’s board of directors.
The company has also posted its interim results for the period ended 31 March 2012, revealing that while internet gaming revenues grew, losses increased significantly during the first sixth months of the financial year.
Internet gaming revenues increased to £15.2m in the six months ended 31 March 2012 compared to £10m for the same period in 2011. However trading profit for internet gaming fell from £12,000 in 2011 to a loss of £417,000 this year. This was attributed in part to the closure of the group’s online casino site Purple Lounge, which has been “temporarily suspended” following a legal claim from CD Casino,com, which counts Michael Caselli, publisher and editor-in-chief of industry magazine iGaming Business, among its directors.
Media Corp described also blamed “negative press” for the shutdown of the loss-making business, which, as expected resulted in the overall losses reported today.
Drummond said: “This has been a very difficult period for the Group, though I believe with the acquisition of Intabet together with further financing, announced today, the Group can now look forward.
“I am stepping down today, following the announcement of the Intabet acquisition and I am confident that in Phil Jackson and Adam Fraser Harris, who are being appointed as chairman and interim CEO respectively, the Group is in being left in experienced and capable hands.”