Friday 21 June 2019

Kitty Bingo owner considering sale as part of strategic review

Stride is working with bankers at Investec.

Is Stride’s number up? (Matthew Horwood/PA)
Is Stride’s number up? (Matthew Horwood/PA)

By Ravender Sembhy, Press Association City Editor

Stride Gaming has confirmed that it is considering a potential sale as part of a strategic review aimed at maximising value for shareholders.

The online firm, which runs Kitty Bingo and Bingo Extra, said that it was reviewing expanding the group’s operations through acquisitions and also whether Stride should seek to participate in “potential industry consolidation through a sale of the company”.

Stride is working with bankers at Investec on the process.

The firm’s board is not currently considering an offer proposal for the company and Stride will report back to the market ahead of announcing its interim results.

Shares were more than 6% higher on Monday afternoon at 110p.

Greg Johnson, analyst at Shore Capital, said that he saw merit in a tie-up with Mecca Bingo owner Rank Group.

“We see significant merit in combining Stride’s gaming assets, including its proprietary platform, with Rank, effectively doubling its online revenues.

“Including likely material synergies, a tie-up with Stride would leave Rank in a stronger position to meet ongoing regulatory headwinds, transform the earnings profile of the enlarged group, as well as being potentially materially accretive.”

AIM-listed Stride, which is valued at £78.5 million, was fined by the Gambling Commission last year for compliance failings.

The group has a clear focus on winning and retaining mass market recreational customers on to its bingo and casino sites Stride

The firm added on Monday: “The group has a clear focus on winning and retaining mass market recreational customers on to its bingo and casino sites.

“Stride continues to leverage its infrastructure and proprietary technology to migrate more customers on to the Group’s higher margin proprietary platform and drive cost synergies across the business.

“The board believes the group will continue to be highly cash generative and the board remains committed to its revised dividend policy to distribute at least 50% of adjusted net earnings in dividends.”

Press Association

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