Machine fines halt Snai-Cogetech acquisition
Combined entities would have been liable for total fine of 465m - Snai could reopen talks if case is resolved in its favour.
Italian operator Snai has cancelled its agreement to acquire rival operator Cogetech as it fights a legal battle to avoid a multi-million euro fine handed down to gaming machine operators by the government’s audit department (Corte dei Conti).
Snai’s board of directors was set to hold ordinary and extraordinary shareholders’ meetings on 28 and 29 February after agreeing to purchase 96% of Cogetech’s parent company Cogemat for a total consideration of 140m on 30 December last year. Both meetings have since been cancelled.
The meetings had been called to allow shareholders to ratify a series of measures proposed by the board to fund the transaction, including a capital increase proposal for Cogemat’s shareholders, but following the fines handed down to each operator by the Corte dei Conti, the company has called the deal off.
If the case is resolved, however Snai said in a statement that it would look to reopen the acquisition process: “While acknowledging the fact that the contractual commitments in the agreement have been resolved, SNAI and the Cogemat shareholders representing over 90% of the share capital agreed today that they were still interested to a possible future integration between SNAI group and Cogetech group should the necessary conditions appear.”
Snai and Cogetech are two of 10 local operators fined a total of 2.5bn by the Corte dei Conti for the alleged failure to connect their land-based VLT terminals to a central reporting network operated by AAMS, designed to allow the Italian regulator to accurately calculate the amount of tax paid by each operator.
All parties involved in the case, including former head of AAMS Giorgio Tino and current director of gaming Antonio Tagliaferri, who were fined 4.8m and 2.6m for not enforcing the setting-up of the network, have announced their intention to appeal the fines.
Snai has been fined 210m, down from an original penalty of 4.8bn, while Cogetech has been ordered to pay 255m, meaning the combined entities would have had to pay as much as 465m should an appeal against the fines fail. As a result Snai, which reported a total net debt of 361m in its figures for the three months ending 30 September 2011, has decided to withdraw from the acquisition.