Betfred agrees ZAR120m Betting World acquisition
UK bookmaker targets South African market after agreeing deal with ailing racetrack operator Phumelela
Betfred has agreed a ZAR120m (£6.1m) deal to acquire South Africa-facing sports betting brand Betting World from bankrupt racetrack operator Phumelela Gaming and Leisure.
The deal, confirmed by Phumelela business rescue practitioner John Evans, will see the racetrack operator completely divest its interest in the Betting World business with effect from 31 May.
Speaking about the conclusion of the deal, Betfred’s CCO Phil Siers said: “We are delighted to see the Betfred International service extended to South Africa and look forward to becoming a leading South African bookmaker and providing a world class service to all our new customers.
“The last 12 months have been difficult for all businesses, but Betfred is excited about the future of Betting World and intends to make a major investment in Africa over the coming years,” Siers added.
The deal ends almost a year of speculation surrounding the status of the South African racetrack operator.
Betfred’s interest in the South Africa-based firm was first revealed in August 2020 when the Warrington-headquartered bookmaker submitted a £40m loan-plus-cash deal to acquire the entire Phumelela business.
The offer included a total purchase amount set between £39.3m and £41.5m and would have loaned Phumelela £29.2m to repay 100% of its owed creditors.
At the time, Betfred stressed its desire to maintain Phumelela’s current management structure as well as its close links with the firm during its ownership of the UK Tote.
However, Betfred faced competition from Mary Oppenheimer Daughters (Pty) Limited (MOD), a firm owned by the daughters of South African industrialist Harry Oppenheimer.
The deal looked to be dead and buried when Phumelela’s auditors accepted an inferior £21.6m rescue package from MOD in August, an offer which included the acquisition of Phumelela’s racetrack and broadcast properties.
The deal also included a payment plan worth £24.8m to guarantee 72% of the company’s existing creditors, an arrangement which found favour with the firm’s creditors who voted to approve the deal.
At the time, a separate legal dispute was launched by investment firm Gold Circle over the vote, with the firm alleging the transaction could not proceed without the firm’s consent. Gold Circle reportedly owns 39% of shares in a linked entity, Phumelela Gold International, something which it stated the firm’s creditors refused to acknowledge during negotiations.
In December, Phumelela delisted from the Johannesburg Stock Exchange and called in the administrators. It was subsequently broken up into constituent parts in order to repay the firm’s creditors, clearing the way for Betfred to return with a renewed bid.
It is understood the claims made by Gold Circle will now be referred to an independent tribunal for resolution.