The Italian operator of one of the world's biggest lotteries, has turned down a takeover bid by Italian publishing house De Agostini.
On Saturday, De Agostini launched an acquisition offer for 100 percent of the capital in Italy's leading lottery firm, Lottomatica, which has held the state concession for lotto in Italy since 1993 when the Ministry of Finance granted the company the public powers to operate the game as a state concession. The concession expires in April 2003 and will be automatically renewed until the end of April 2012.
De Agostini was offering 6 euros per share, equal to a premium of 26 percent, and as high as 46 percent taking into consideration the share price on September 26, just before Marco Tronchetti Provera announced his intention to sell his 34.4 percent of capital in Lottomatica to Olivetti and Telecom Italia.
De Agostini, which is chaired by Marco Drago, was willing to pay out a total of 1.075 billion euros for 100 percent of Lottomatica's capital.
Lottomatica, which runs the national lottery, yesterday told Italian stock market regulator Consob that it considered the offer presented by the Novara-based group to be "unacceptable" and has asked Consob to turn down De Agostini's offer. A Lottomatica spokesman stated that the company believes there are already too many of De Agostini's companies involved in the operation. The company also says that De Agostini will need authorization from the government before acquiring a controlling stake, as Lottomatica is a government concession. Lottomatica is quoted on the Mercato Telematico Azionario of the Borsa Italiana..
Key figures
Lottomatica SpA said it posted a net profit of 104.6 billion lire in the nine months to September 30, compared with 93 billion lire for the whole of 2000. The company added that its full year results will be higher than in 2000. It said nine months revenues totaled 702 billion lire compared with 847 billion for the whole of 2000. Gross operating profits totaled 292.4 billion lire compared with 317.9 billion for the whole of 2000, and operating profit totaled 166.9 billion lire compared with 165.9 billion for the whole of 2000. In the third quarter, revenues from the lottery rose to 212 billion lire from 120.0 billion in the third quarter of 2000.
In particular, in 1999 Lottomatica became the leading lottery operator in the world ranked by betting volumes, and later in 2000 it was classified in third place. Italy's gaming and betting market grew strongly between 1995 and 2000, as takings increased from 17,343 to 26, 921 billion lire. Lottomatica SpA controls 100 percent of Lottomatica Italia Servizi, Lottomatica International, Lottomatica Sistemi and Cirmatica and holds 93.78 percent of Twin, a company set up to operate Tris horse race betting. The entire group employs more than 800 people.
Games
The lotto game makes up 95 percent of Lottomatica's revenues, though it has begun branching out into other games including one based on Formula One motor racing. "Lotto telefonico" further simplifies gaming, as numbers may be played by calling a special dedicated phone number operated by approved telephone companies (currently Telecom Italia, Telcos and Wind), through use of a pre-paid card (with a value of between 20,000 and 1 million lire). Launched nationwide in April 2000, the service offers two playing options: through an automatic voicemail system or through call center operators.
The newly-launched Stream Lotto digital television channel and the Web site at www.giocodellotto.com offer statistics and detailed information and a number of interactive games designed to enhance the appeal of lotto to a broad range of users. These ventures pave the way for the future of lotto gaming using the innovative channels (such as over the Internet, should legislation allow).
Other games are:
TRIS
Since January 2000 Lottomatica has been collecting stakes for Tris on behalf of the Sara Bet concession, both directly and through subsidiary company Twin. Gaming income from Tris, a game associated with a special horse race, amounted to 894 billion lire, of which Lottomatica took in 397 billion and Twin 210 billion lire.
FORMULA 101
Since March 2000 Lottomatica has been acting as coordinator for the new Formula 101 game, by proxy of the FOA, as well as directly collecting receipts (worth over 9 billion lire in 2000). The object of this game is to pick the first eight cars to finish at every Formula 1 race. There are three levels of prizes--gold, silver and bronze--and a jackpot for players who score the maximum of 101 points.
Strategy of objectives
Lottomatica's main development objectives are:
- To consolidate market share in the Italian gaming sector;
- To reinforce the company's presence in the area of services for citizens and businesses and in ticketing services;
- To capitalize on new market opportunities that arise in the management of new games and the application of new technologies, both in Italy and abroad.
These objectives will be reached through further development of the IT network and through the continuous technological improvement of software and hardware components as well as the development of a structure of commercial agents operating in synergy with the network of lotto of outlets to sell more goods and services.