RNS Number:4956N
Sportingbet PLC
14 July 2003

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES OF
AMERICA, CANADA, AUSTRALIA OR JAPAN



14 July 2003


                                Sportingbet Plc
                        ("Sportingbet" or the "Company")

          In principle agreement for settlement of Sportsbook earn out

                        Termination of offer discussions

                       Settlement of Australian earn out



On 24 June 2003, the Board of Sportingbet announced that it had been in
discussions to reschedule and settle the Company's earn-out obligations in
respect of the acquisition of Sportsbook in 2001, as well as considering a
possible offer for the Company.  The possible offer talks have now been
terminated.


The Board is pleased to announce that it has agreed in principle the
rescheduling and settlement of the Company's earn-out obligations (the "
Settlement") with the vendors of Sportsbook (the "Vendors").  The Settlement
will satisfy all amounts and obligations arising under the 2001 Sportsbook
Acquisition Agreement and related contracts (the "2001 Agreement").


The #70.1 million Settlement comprises equity (including convertible) valued at
#30.2 million (based on a Sportingbet share price of 25.5p) and a Loan Note to
the value of #39.9 million.


Background - the 2001 Sportsbook Acquisition Agreement


Under a performance-related acquisition agreement entered into in July 2001,
Sportingbet acquired Sportsbook, a US focused internet sports bookmaker, for a
maximum total cash and share consideration of US$204 million (#125.2 million).
The consideration comprised initial consideration of US$44 million (#27.0
million) paid in cash and shares, a US$10 million (#6.1 million) convertible
loan note due February 2004 and additional performance-related consideration of
up to US$150 million (#92.0 million) payable in cash and shares from September
2003 onwards.


Since its acquisition, the performance of Sportsbook has exceeded expectations
with customer numbers for the Group's American business increasing from a pro
forma 358,437 in June 2001 to 644,349 in March 2003 resulting in a significant
increase in gross margin.  Accordingly, the maximum amount of
performance-related consideration will become payable in September 2003 as
opposed to being payable over the period 2003 to 2008 as anticipated at the time
of acquisition.


Sportingbet considers that the outstanding amounts due to the Vendors comprise:


>    cash consideration of approximately US$70.25 million (#43.1 million)
comprising  US$65.25 million in respect of the performance-related consideration
and a further US$5 million payable as bonuses under the terms of consultancy
agreements;


>    the repayment in February 2004 of US$10 million (#6.1 million) convertible
loan notes issued as initial consideration, which remain outstanding; and


>    US$79.75 million (#48.9 million) payable in new ordinary shares at a deemed
price of 73 pence per share, subject to the Vendors and their associates holding
in aggregate no more than 29.9 per cent of the issued share capital of the
Company with the balance payable in cash.  As a maximum of 58,220,261 new
ordinary shares could have been issued under this mechanism at this point in
time, a balancing cash payment of US$10.5 million is also due.


The Proposed Settlement


The principal terms of the proposed Settlement comprise:


>    the issue to the Vendors of a US$65 million (#39.9 million) non-interest
bearing loan note (the "US$ Loan Note"), up to US$30 million of which is to be
redeemed following completion. The balance of the US$ Loan Note will be
redeemed, over an anticipated three and a half year period from cash balances
held by the Company after adequate provision, in agreed amounts, has been made
for Sportingbet's anticipated future working capital and development
requirements;


>    the issue to the Vendors of 28,580,358 new ordinary shares in Sportingbet
which, together with the shares already held by the Vendors and their
associates, would increase their interest in the Company to 41,347,368 ordinary
shares, representing 19.9 per cent of the Company's enlarged issued share
capital; and


>    the issue to the Vendors of a US$37.4 million (#22.9 million) unsecured,
non-interest bearing, non transferable, convertible note 2020 (the "US$
Convertible Note"), US$13.3 million nominal of which will be mandatorily
convertible into 29,639,903 ordinary shares at the Company's option in 2020. The
US$ Convertible Note will be convertible at any time, in whole or in part, into
an aggregate of 83,171,926 new ordinary shares in the Company. Full conversion
of the US$ Convertible Note would give the Vendors and their associates an
interest in 124,519,294 ordinary shares, representing 42.8 per cent of
Sportingbet's then enlarged issued share capital.


The Settlement remains subject to final Board approval, final documentation and
to completion of documentation in relation to the Company's proposed new banking
facilities.


Proposed new banking facilities


Barclays Bank PLC has agreed, subject to the completion of documentation and
certain conditions precedent, to provide the Company with a #10 million
revolving term loan facility, repayable by 31 March 2005, and to extend the
Company's overdraft facility to #10.5 million.


Settlement of outstanding consideration due in respect of the Number One Betting
Shop Limited


The Board is also pleased to announce that it has settled the Number One Betting
Shop earn-out obligations.  The agreement reduces the final cash earn-out
payment by A$3.5 million (#1.3 million) to A$1.9 million (#0.7 million) and
reduces the number of shares to be issued to 9,503,286 to take account of the
Company's potential liabilities arising from ongoing litigation in Australia.
The Board does not expect this litigation to reach a final judicial conclusion
until late 2004.


In the event that there is a final judicial determination of the litigation in
favour of the Company, then Sportingbet will pay the vendors an additional A$3.5
million (#1.3 million) in cash and 11,216,636 ordinary shares, of which A$2.7
million (#1.0 million) would be recoverable from the Australian courts.


Further announcement


A further announcement setting out the definitive terms of the Settlement,
together with the Company's preliminary results for the year ended 31 March
2003, is expected to be made before the end of the month.


Commenting on the proposed Settlement, Nigel Payne, Chief Executive, said:


"We are pleased that we have been able to agree practical arrangements with the
Sportsbook and Australian vendors in line with the terms of the original
agreements.  The Sportsbook business has performed above all of our expectations
since we acquired it in July 2001.  With these arrangements in place, management
will now be able to focus its attention on exploiting the significant growth
opportunities for the business."



Enquiries:

Sportingbet Plc
Nigel Payne                          020 7251 7260

Cubitt Consulting
Peter Ogden                          020 7367 5100


Note:  assumed US$ exchange rate of #1:US$1.63


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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