Proposed Plus Connect acquisition to boost Activistic presence in Australia
Thursday’s announcement by Activistic (ASX: ACU) that it has entered into a Bid Implementation Agreement (BIA) to make an off market takeover offer to acquire Plus Connect is an important development for the company as it would facilitate access to one of the most widely accepted charitable and not for profit fundraising activities in the world, charity based lotteries.
To provide some insight into the proposed acquisition, Plus Conne
ct is an Australian based company established to commercialise a new generation of online and app-based betting and social gaming products. The group aims to deliver a socially responsible wagering model providing significant benefits to partner charities and sporting organisations.
Following regulatory approvals the charity product was launched in 2014 with Plus Connect focusing on business and cost consolidation while implementing systems and partnerships to deliver its broader business strategies.
The group’s first charity product is the Weather Lottery, an online lottery wagering product marketed in collaboration with designated Australian charities and operated under the group’s Northern Territory licence.
Plus Connect is developing an online lottery wagering product to be marketed in collaboration with sporting clubs and associations in Australia. This product will offer bets on the results of a Sports Lottery product offered under a Norfolk Island licence.
Features of this product include a fixed odds bet on the outcome of sports lottery, the payment of 25 cents/$1 to the sporting club with the added attraction of driving customer engagement with the club. This product is scheduled for launch in late 2016.
However the date is yet to be finalised, so if considering this stock for your portfolio, take into account all information and seek professional financial advice.
Proposed consideration for the acquisition under the BIA is 180 million ACU shares which equates to 3.07 ACU’s shares for each Plus Connect share.
ACU has also agreed on completion of the acquisition to issue 12.5 million shares to a Plus Connect creditor in satisfaction of a $250,000 debt.
ACU has also agreed under the BIA to provide financial support for the ongoing development of Plus Connect by way of a $500,000 loan to assist with working capital and marketing expenditure.
In the event that the acquisition does not proceed, the loan funds will be repayable within 60 days of the BIA being terminated and attract interest at a commercial rate of 10% per annum on the balance outstanding from day to day.