Multichoice Makes A $281.5 Million Offer For BetKing's 49 Percent Stake

Online IT Certificate Courses Multichoice makes a $281.5 million offer for BetKing's 49 percent stake. 

Multichoice makes a $281.5 million offer for BetKing's 49 percent stake 

Multichoice, an African entertainment company, has made a bid of approximately $281.5 million to Blue Lake Ventures Limited (BetKing) to increase its stake in the company to 49 percent from 20 percent.

According to the company, the offer was made following the company's board of directors' approval of an increase in its stake on 10 June 2021.

This comes less than a year after the entertainment company paid $81 million for a 20% stake in BetKing.

The latest transaction includes the establishment of an employee stock option plan through the allocation of 10% of the company's equity. Additionally, the company's shareholders will own shares in the diluted business.

Multichoice explained that after diluting its initial 20% stake to 18%, its subsidiary Mwendo will acquire 9.6% of BetKing for $100 million as part of an equity raise to fund expansion. This increases the company's stake to 27.6 percent.

Mwendo will also acquire a 21.4 percent stake in BetKing for $181.5 million from minority shareholders who are exiting in part, bringing the total stake to 49 percent.

However, this latest transaction is conditional on meeting substantive conditions and the transaction becoming effective.

These include finalizing the employee share incentive plan, securing debt financing from MultiChoice, and obtaining regulatory approvals from the appropriate competition or antitrust authorities in a number of jurisdictions.

Additionally, an appropriate exit clause must be agreed upon for minorities who are partially selling down to recoup some of their initial investment.

As a result of the transaction, the $31 million earn-out associated with the acquisition of the company's first 20% will be triggered and payable.

This means Multichoice will need to raise a total of $294.45 million (R4 billion) in rand-denominated debt in order to complete the transaction.

Calvo Mawela, CEO of MultiChoice Group, explained that sports betting is an intriguing market that complements the company's Pay-TV business.

MultiChoice Group CEO Calvo Mawela said that “Sports betting is an exciting market that complements our Pay-TV operations. We have a large selection of sports on our platform, and many people who wager watch additional games.”

He explained that the majority of people who wager watch more games, and Multichoice's platform features a plethora of them. 

 

Pan African Expansion 

BetKing was co-founded in 2017 by Adekunle Adeniji and has grown through the use of entertainment and cutting-edge digital technology combined with a highly customer-centric, data-driven approach.

BetKing is well-known for having JJ Okocha of the Super Eagles as its brand ambassador.

The company began in Nigeria but has expanded to include operations in Kenya and Ethiopia.

Multichoice revealed that the betting company is planning a significant pan-African expansion, including an entry into South Africa.

 

In Conclusion

The widespread acceptance of mobile payments in Africa has aided the rapid growth of online betting sites such as BetKing across the continent.

If the new deal is completed, the company will have increased capabilities to consolidate its position in Nigeria and accelerate its pan-African expansion.

The transaction is expected to close in August 2021, assuming all precedent conditions are satisfied.

 

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