TVG Decides Against Buying Majority of Youbet.com
Updated: Saturday, April 3, 2004 3:20 PM
Posted: Thursday, April 1, 2004 9:28 AM
TV Games Network will not exercise its warrant to become a majority shareholder in Youbet.com, though it will receive an additional 1-million shares in Youbet for providing notice of its decision prior to April 1.
Under the language of the warrant, TVG would have been required to pay $36.5 million for 21.6 million shares ($1.69 a shares), giving it a 51% interest in Youbet and representation on the board of directors. TVG presently owns about 4-million shares in Youbet. Youbet, which closed trading Wednesday at $3.64 a share, will continue to carry TVG's exclusive track signals.
Though still operating at a loss, Youbet improved its financials significantly in 2003. Gross handle for the year was up 69% to $276 million and earning before interest, taxes, depreciation, and amortization improved by $5.3 million. Youbet lost just over $4 million, or 14 cents a share, in 2003. The company lost $9 million in 2002.
Last year, TVG sued Youbet for proxy material sent by Youbet to shareholders that proposed a staggered board of directors and supermajority requirement. In exchange for dropping the litigation, Youbet Feb. 24 agreed to withdraw the proxy material and pay TVG $725,000.
Officials for Youbet and TVG were not immediately available for comment.
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