Barcrest Sold But Is It A Fair Deal?
Barcrest, a leading gaming and amusement machine maker is being bought out by an American company. However, the Office of Fair Trading has started to investigate the deal since it could be breaching competition rules.
The US company, Scientific Games Corporation, agreed on the deal a month ago and offered a massive thirty five million pounds for the company.
Barcrest has operations all across Europe and the US company was looking to expand into the UK with betting shops, bingo halls and amusement arcades along with pubs too. However, it seems that this deal contravenes the competition rules since it would lessen competition considerably in the gaming and amusement machines sector.
The US company already has a base in Hounslow in Middlesex with a gambling machine enterprise. This company, called the Global Draw, controls 43 percent market share of the market in the UK and operates a staggering eighteen thousand machines in more than three thousand five hundred outlets across the country. This also includes a string of betting shops too. Also in its stable is the Games Media group which is based in Wolverhampton. It makes its daily bread from operating arcade machines in pubs across the country.
Barcrest earned income last year of more than forty five million pounds up to the end of September. It did this by putting machines in all the usual venues including arcades, betting shops, pubs and bingo halls and also provides all kinds of games on mobiles, interactive digital TV and across the internet too.
Bass, the brewing giants who also had a hand in the leisure industry, were the original owners of Barcrest and it was bought in 1998 by International Game Technology based in Nevada. The going price at that time was forty two million pounds. This company put Barcrest up for sale in the autumn of last year at an undisclosed price.
The US company, which is presently trying to placate the Office of Fair Trading, agreed to buy Barcrest for thirty five million pounds with a down payment of thirty three million in cash to begin with. The remaining two million will be paid only when conditions have been met and certain contracts signed.
Of course, the Office of Fair Trading has the mandate to scupper all these plans if it feels that the fair competition rules are not being upheld. Both parties must be holding their collective breath then while they await the outcome of these investigations.
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Posted by admin
on Jun 4 2011. Filed under Financial News.
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