Tipp24 SE: Tipp24 plans to spin off German business and form independent listed company Lotto24 AG

Apr 20, 2012 7:42 PM

Tipp24 SE / Key word(s): Dividend/Letter of Intent

20.04.2012 / 19:42


Lotto24 shares to be distributed to shareholders as dividend in kind

(Hamburg, 20 April 2012) Tipp24 SE intends to spin off its German lottery
brokerage business launched in February 2012 under the Lotto24 brand from
the Tipp24 Group and to transfer it to a public limited company to be
listed in the Prime Standard segment of the Frankfurt Stock Exchange. The
Executive Board and Supervisory Board will therefore propose to the Annual
General Meeting of Tipp24 SE to distribute shares in the future Lotto24 AG
(formerly Tipp24 Deutschland GmbH) to all shareholders in a 1-to-1 ratio as
a dividend in kind. Each shareholder of Tipp24 SE would therefore
additionally receive a Lotto24 share for each Tipp24 share held by it.

After the planned spin-off of its German operations, Tipp24 SE will focus
on the expansion of its foreign business. In particular, Tipp24 SE intends
to establish a new international business division with Internet services
for lottery companies.

Lotto24 AG will focus on brokering state lotteries in Germany. Launched in
February on www.lotto24.de, the new service only targets customers in
Schleswig-Holstein and Saxony-Anhalt at present. In Schleswig-Holstein, new
gaming legislation was passed in 2011 which now permits the online
brokerage of state lotteries. In Saxony-Anhalt, Tipp24 SE had successfully
fought in court for the legal right to broker lotteries online. Tipp24 SE
believes that with the adoption of the Revised State Treaty on Games of
Chance in July 2012, there will once again be a legal basis for the online
brokerage of lotteries throughout Germany.

Lotto24 AG will have to apply for permits from the various regulatory
authorities of the individual states in order to act as a broker in
Germany. In this case, a continued legal connection between Lotto24 AG and
Tipp24 SE or its fully consolidated minority holdings may jeopardize permit
application processes. In order to enable the resumption of business in
Germany without such legal disputes, Tipp24 SE plans spinning off its
German activities into an independent listed company.

Dr. Hans Cornehl, CEO of Tipp24 SE, states: 'Tipp24 has been involved in
legal disputes about the resumption of its online lottery brokerage
business in Germany for four years now. Although we have achieved some
clear victories, we believe that a complete legal separation is the best
option to provide Lotto24 AG with a starting position in the German market
which is not burdened by legal disputes.'

The future Lotto24 AG will therefore be ideally positioned to benefit from
the imminent liberalization of online lottery brokerage in Germany and to
take advantage of the significant opportunities offered by this market. In
the course of resuming online lottery brokerage in Schleswig-Holstein and
Saxony-Anhalt, work has already begun on establishing Lotto24 as a strong
and distinctive brand for the German business. Moreover, Tipp24 SE will
provide the company with a multi-year licence for a powerful IT platform.

Petra von Strombeck, Executive Board member of Tipp24 SE in charge of
marketing, states: 'Following the ban of online lottery brokers as of 2009,
the German lottery market shrank to a volume of around EUR 6.5 billion.
With regard to per capita lottery spending and the previously banned online
brokerage business, the German market has a great deal of catching up to
do. We are therefore convinced that the forthcoming market liberalization
and resumption of online lottery brokerage will open up considerable growth
potential and offer sustainable benefits for Lotto24.'
Planned transaction steps:

Tipp24 SE intends to transform its current subsidiary Tipp24 Deutschland
GmbH into a public limited company and change its name to Lotto24 AG. To
this end, Tipp24 SE will transfer assets required for the establishment of
business to Lotto24 AG in the form of a contribution in kind.

In connection with the planned distribution of a dividend in kind and
initial listing of Lotto24 AG shares, Lotto24 AG is also to receive
sufficient funds to guarantee operations should there be delays to the
further liberalization of the German market. In order to meet these
liquidity needs, Lotto24 AG plans raising cash through a public offer of
shares ('new shares') to all shareholders of Tipp24 SE.

According to current plans, the Annual General Meeting of Tipp24 SE on 22
June 2012 is to decide on the distribution of shares held by Tipp24 SE in
Lotto24 AG ('old shares') as a dividend in kind. On the basis of a
valuation report commissioned by the Executive Board of Tipp24 SE, an
enterprise value of EUR 19.97 million has been determined for Lotto24 AG.
Based on currently 7.985.088 dividend-bearing Tipp24 shares, this
translates into a value of EUR 2.50 for the dividend in kind allocated to
every Tipp24 share. Tipp24 SE does not intend to pay out a cash dividend
for the fiscal year 2011. Details on the process and time schedule will be
published with the invitation to the Annual General Meeting. An initial
listing of the old and new shares in Lotto24 AG in the Prime Standard
segment of the Frankfurt Stock Exchange is planned for early July 2012.

End of Corporate News


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Language:    English                                                  
Company:     Tipp24 SE                                                
             Straßenbahnring 11                                       
             20251 Hamburg                                            
Phone:       Tel.: +49 (0)40 325533-660; Mob.: +49 (0)170 92 67 73 9  
Fax:         +49 (0)40 325533-5600                                    
E-mail:      presse@tipp24.de                                         
Internet:    www.tipp24-se.de                                         
ISIN:        DE0007847147                                             
WKN:         784714                                                   
Indices:     SDAX                                                     
Listed:      Regulierter Markt in Frankfurt (Prime Standard);         
             Freiverkehr in Berlin, Düsseldorf, Hamburg, München,     
End of News    DGAP News-Service  
165949 20.04.2012