Greece extended the 48 hour deadline given to the only bidder to purchase OPAP, the gambling monopoly in the country to raise its offer. HRADF, the privatization agency in-charge of the bidding process, gave another week to increase its proposal to at least €650 million.
Emma Delta, an investment fund controlled by Czechoslovakian investor, Jiri Smejc and Greek ship owner, George Melisanidis requested the HRADF to extend its deadline until May 1 to evaluate whether it will increase its offer and to figure out how to do it.
An executive from Emma Delta who requested Reuters not to disclose his identity said, “It wasn’t possible to wrap up the … evaluation and response within a pressing 48-hour time frame. This is a multinational investor group with the respective businessmen dispersed in different parts of the world.”
Paris Mantzavras, analysts at brokerage firm Pantelakis Securities opined that the extension given to the investment fund indicated that a deal is possible. He said, “The extension shows that both parties remain engaged in the process. Given the small valuation gap, it is very likely that they will reach a deal next week.”
Last Tuesday, Emma Delta stated that its proposal to acquire OPAP was fair and open. The investment fund also said that the gambling monopoly has “internal structural problems with profitability hampered by a cumbersome corporate structure and tight cash flow, which is forecasted to continue for the next two years.”
Last year, OPAP emerged as the most profitable company in Greece. Its net income was €505 million and posted a 49.2 percent return on equity. However, its performance will likely change because it is confronting several challenges including a legal battle against William Hill plc (LON:WMH) and regulatory hurdles for its proposed video-lottery and online betting businesses.
In addition, the renewal of its contract with its long-time technology provider Intralot, weeks prior to its privatization is also controversial. This year, the government of Greece implemented a 30 percent tax on gross gaming revenue.
The Greek government owns 34.4 percent stake OPAR. Baupost Group, the investment management firm headed by Seth Klarman owns a 5.2 percent stake in the company. Dan Loeb’s Third Point submitted a proposal for the company, however it was disqualified.