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Uncertainty surrounding the British National Lottery and Allwyn affects the share price of the American investor

Since the listing of Cohn Robbins Holdings Corp. on the stock exchange last fall, the share price was in a fairly narrow range between $9.80 and $10. However, only on Friday, apparently under the influence of speculation regarding the lottery license, the share price fell below nine dollars for the first time.

The course took a downward direction after an interview with Allwyn CEO Robert Chvátal was published on the website of The Times. The article mentions that Allwyn “can’t celebrate yet”. Although the British Gambling Commission granted Allwyn a 10-year license to operate the lottery in the spring, and the decision was upheld by the British High Court in the summer, the whole matter is still not final.

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This is because rival Camelot, which has held the license since its inception in 1994, does not want to give up the entire business without a fight due to the profitability of the business. And so they are trying to overturn the authority’s decision in court. The first phase of the court hearing is already taking place this month. Until the trial ends, according to The Times, the process of transferring the operation of the lottery to the Allwyn Group (formerly known as Sazka) is on hold.

In June, the British High Court rejected Camelot’s appeal against the Gambling Commission’s decision and granted the commission the right to sign a contract with Allwyn. According to the license, the final takeover of the license should take place with effect from February 2024. Camelot owns the large Canadian pension fund Ontario Teachers’ Pension Plan.

A court hearing, scheduled for September 13 and 14, is to assess whether Camelot can appeal the High Court’s verdict. If Camelot succeeds, another hearing will take place in January, which would further delay the licensing process.

He told The Times that he hoped the courts would rule in Allwyn’s favor and that he had faith in the British legal system. The reason is also that delays and complications in the transfer of license operations can cause huge losses. The Gambling Commission had previously estimated them at more than one billion pounds, i.e. over 28 billion crowns. “There’s not much time to spare. The biggest victim would be the lottery itself,” CEO Allwynu Chvátal told The Times.

The National Lottery is one of the biggest lotteries in the world, having raised over £45 billion for charity since its inception in the 1990s.

Allwyn is very likely to list shares on the New York Stock Exchange in the coming weeks. This will happen through a connection with the aforementioned specialized acquisition firm Cohn Robbins Holdings. This is a so-called special purpose acquisition company (SPAC). The merger, which Allwyn agreed with the investment vehicle back in January, will be voted on by CRHC’s shareholders at the general meeting in just a few days – specifically on September 7.

It is worth noting that Gary Cohn (one of the two founders) is a former president of Goldman Sachs and was at one time the chief economic adviser to former President Donald Trump. CRHC raised over $800 million from investors last October.

Anyway, it looks like Camelot is fighting more than just the courts. On Thursday, an article was published on the website of the British The Guardian, which dwells on the fact that the Czech investment group PPF with significant interests in Russia could acquire a roughly five percent stake in Allwyn, which is the preferred candidate for a ten-year license to operate the British national lottery. Given the Russian invasion of Ukraine, this is a very sensitive issue in Britain.

PPF sold its Russian banking activities (specifically Home Credit) in May, but still has a number of investments in Russia, such as insurance, heavy industry and the real estate market, The Guardian wrote.

CRHC announced on Monday that PPF has committed to invest up to $260 million (roughly CZK 6.4 billion) in Allwyn shares. If she were to buy the maximum number of shares as part of her promise, she would have the aforementioned roughly five percent stake in Allwyn.

Komárk's Allwyn is one step away from entering the New York Stock Exchange. All that is needed is the consent of the investors

According to the British newspaper, the agreement with PPF represents the latest connection between Allwyn and Russia. The newspaper points out that Komárk’s KKCG owns Moravské naftové doly, which has a joint venture with the Russian company Gazprom for gas storage in Moravia.

According to The Guardian, Allwyn said the PPF would not own any stake in its UK division, which would be licensed to run the UK’s national lottery from 2024. She added that across the entire Allwyn group, PPF’s stake in the deal will not exceed 4.99 percent. “This strictly passive investment does not give PPF any management role,” Allwyn pointed out, adding that it strongly condemns the attack by Russian troops on Ukraine, which it described as brutal.

According to the British newspaper, PPF said it is working to exit the Russian market and that it wants to focus on investments in Europe. She added that she strongly condemned the invasion of Ukraine and pointed out that there was no connection between the Russian investments in the PPF and the planned investment in Allwyn.

Statement of KKCG, or The newspaper E15 finds out about Allwyn’s uncertainty regarding the final granting of a license to operate the British National Lottery.


The article is in Czech

Tags: Uncertainty surrounding British National Lottery Allwyn affects share price American investor

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