Sportech has successfully concluded its delisting from the Alternative Investment Market (AIM) of the London Stock Exchange. This pivotal transition marks a strategic shift for the company as it prepares to register for ‘private limited’ status.
Strategic transition
Sportech’s decision to delist its shares was first announced in September of this year.
At that time the market reacted with a notable nearly 50 percent decline in its share price. The Edinburgh-based company, renowned for its meticulous operations, which includes a number of sports bars and betting venues in the US state of Connecticut, holds an exclusive licence to offer pari-mutuel wagering. It maintains a crucial agreement with the Connecticut Lottery Corporation to provide retail sports betting.
Additionally, Sportech extends its services into the digital technology, offering online pari-mutuel betting in Connecticut through Mywinners.com and catering to a nationwide audience across the United States via the platform 123bet.com.
The delisting strategy was brough about by a comprehensive review conducted by Sportech. This thorough assessment concluded that the obligations and burdens of maintaining a publicly listed status had become signficantly substantial. The financial and regulatory costs of remaining a publicly traded company were found to outweigh the benefits, prompting Sportech’s strategic decision to transition to the status of a private limited company.
Journey to Sportech Limited
With the delisting process now completed, Sportech is ready to start on the next phase of its corporate journey. The company will need to re-register itself as a private limited company, operating under the name “Sportech Limited.” The official adoption of new articles of association is anticipated to take place in the coming week.
This transformation signifies a huge change in Sportech’s operational status and governance structure. The limited status will allow the company greater flexibility and control over its operations, free from the compliance and reporting requirements of being a publicly traded entity.
Implications for shareholders
Sportech’s transformation from a publicly listed company to a private limited one carries significant implications for its shareholders. To facilitate future shareholder transactions involving the company’s ordinary shares, Sportech has engaged JP Jenkins, a reputable trading platform dedicated to unlisted companies.
A necessary component of this arrangement is the establishment of a matched bargain facility. This facility acts as an intermediary, connecting investor offers to buy and sell certain securities directly with one another. Its operation is expected to extend for a minimum of 12 months from the key date of 16 October 2023, as per Sportech’s statement. The intention of the company’s directors is that this facility will continue beyond that timeframe.
However, it’s important to highlight that shareholders have been cautioned regarding the potential withdrawal of the matched bargain facility after a year. This action could potentially limit their ability to trade Sportech shares. In the meantime, shareholders desiring to execute share transactions can continue to do so through their stockbrokers.
The final and critical aspect of this transition is the impact on Sportech’s share price. As of October 17, shares are trading via JP Jenkins at 98p, a notable increase from the closing price of 84p on the preceding day. Nevertheless, it’s essential to note that this price still remains significantly below Sportech’s historical high, with shares trading for more than ￡4 as recently as January 2022.
Sportech’s decision to shift from a publicly traded entity to a private limited company represents a defining moment in its corporate trajectory, signalling adaptability and a commitment to strategic evolution.
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