"TVG's warrant exercise demonstrates their support for Youbet.com's growth strategy," said David M. Marshall, Youbet.com's chief executive officer. "We are pleased that TVG has recognized our success in growing Youbet.com's product offerings and building a dynamic management team." TVG president and CEO Mark Wilson said the strategic relationship with Youbet.com has been very successful. Youbet.com licensed certain track content and intellectual property from TVG, and agreed to pay fees to TVG based on the handle generated by Youbet.com from wagering activity."Youbet.com's new management team has already made significant progress and we look forward to continuing to strengthen our relationship," Wilson said.
Television Games Network has acquired 16.6% of Youbet.com's outstanding shares of common stock.The live horse racing channel and wagering service, a subsidiary of Gemstar-TV Guide International, was given the option of buying 3,884,650 shares for one-tenth of a cent per share as part of a licensing agreement made on May 18 of last year. Youbet.com stock closed at 72 cents per share at the end of trading Wednesday.TVG has a second warrant to purchase up to 51% of Youbet.com's common shares outstanding on the date the warrant is exercised, including the shares TVG just bought. The second block of stock can be purchased any time on or before May 18, 2004 and if exercised would generate approximately $40 million to Youbet.com, a California-based online wagering and live racing service.