Spreadex confirms it made £0.30-per-share all-cash bid for LCG and was rejected

Ramping up pressure on the board and shareholders of London Capital Group (LON:LCG), online sports betting and financial spread betting firm Spreadex confirmed that it had indeed recently made a proposal to acquire LCG, and was rejected by LCG’s board.

Spreadex’s offer was all-cash, at £0.30 (30 pence) per share, representing a 46% premium to LCG’s share price on June 27.

It looks like Spreadex still wants to proceed with an acquisition of LCG, and is doing what it can to convince LCG shareholders to reject the £17.5 million financing proposed by an investor group led by Charles Henri Sabet. Sabet’s group would take effective control of LCG if their proposal is accepted, with LCG shareholders receiving nothing (upfront) except the hope that Sabet and his team can bring LCG back and increase shareholder value.

LCG shareholders must now take into account that there’s an all-cash offer on the table while weighing Sabet’s proposal, which still has the backing of LCG’s board.

Should be a very interesting vote tomorrow.

Spreadex’s announcement goes as follows:

2 July 2014

Possible offer for London Capital Group Holdings plc

Spreadex.com Limited (“Spreadex”) notes the recent press speculation and confirms that on 30 June 2014 it submitted a preliminary, non-binding indication of interest to the board of directors of London Capital Group Holdings plc (“LCG”) regarding a possible cash offer for the entire issued and to be issued share capital of LCG. Spreadex’s approach was rejected by the board of LCG and no discussions are currently taking place. Spreadex is considering its options. However, there can be no certainty that any firm offer will be made.

Spreadex’s proposal envisaged an all cash offer at a price of 30 pence per LCG share, representing a substantial premium of approximately 46% to LCG’s closing share price of 20.5 pence on 27 June 2014.

The making of any firm offer by Spreadex would be subject to pre-conditions (all of which may be waived in whole or in part by Spreadex), including the following:

· the proposed financing announced by LCG on 17 June 2014 not proceeding;

· satisfactory completion of a due diligence review by Spreadex;

· the unanimous and unqualified recommendation by the directors of LCG of the terms of any offer; and

· the directors of LCG giving irrevocable undertakings to accept any offer in respect of their LCG shares (or to vote in favour of a scheme of arrangement).

In accordance with Rule 2.6(a) of the Code, Spreadex must, by not later than 5.00 p.m. on 30 July 2014, either announce a firm intention to make an offer for LCG in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.

Spreadex reserves the right to make an offer at any time for less than 30 pence for each LCG share:

· with the agreement or recommendation of the LCG board;

· if a third party announces a firm intention to make an offer for LCG which, as at the date Spreadex announces a firm intention to make an offer for LCG, is valued at a lower price than 30 pence for each LCG share; or

· following the announcement by LCG of a whitewash transaction pursuant to the Code.

In accordance with Rule 30.4 of the Code, a copy of this announcement will be available on Spreadex’s website at www.spreadex.com.

A further announcement will be made as appropriate.

The complete Spreadex press release can be viewed here.

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