TVG Decides Against Buying Majority of Youbet.com
by Victor Ryan
Date Posted: 4/1/2004 9:28:49 AM
Last Updated: 4/3/2004 3:20:24 PM

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.

Copyright © 2014 The Blood-Horse, Inc. All Rights Reserved.

SUBSCRIBE to The Blood-Horse magazine TODAY!