Pools operator catches eye of Canadian firm

Sportech is being eyed up by Toronto'listed Contagious Gaming. Picture: Contributed
Sportech is being eyed up by Toronto'listed Contagious Gaming. Picture: Contributed
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Football pools operator Sportech could be swallowed by a Canadian software group in a deal that values the firm at more than £129 million.

The company, which has its roots in Edinburgh, said Toronto-listed Contagious Gaming was poised to make an offer at a premium to Thursday’s share price of 62.63p.

In addition, Sportech shareholders would also receive about half of the net proceeds in the event of a successful VAT repayment claim on its Spot the Ball game, with the rest going to the enlarged group.

Sportech has argued that Spot the Ball is a game of chance, not skill, and therefore should be exempt from VAT, and in June last year the company received a £93m cheque from the taxman after a tribunal ruled in its favour.

However, HM Revenue & Customs successfully appealed against that decision in September, forcing Sportech to hand the money back. But in another twist, the firm won the right to fight its corner in the Court of Appeal, with a result expected later this year. The claim is now valued at about £97m.

Sportech began life as Rodime, an Edinburgh-based technology licensing company that bought the Littlewoods pools and gaming business for £161.8m in 2000. It said: “There can be no certainty that any formal offer for the company will be forthcoming, nor as to the terms of any such formal offer.”