Pacific Online acquires 37.5% of HHR Philippines for P150M
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Pacific Online Systems [LOTO 4.00 suspended] [link], the online lottery operator owned by Willy Ocier, said it has signed an Investment Agreement to purchase 37.5% of HHR Philippines Inc. (HHR) for P150 million in an all-cash deal. The transaction will give LOTO a significant minority stake in HHR, which is an e-Casino licensee under PAGCOR. HHR is known for its internet gaming brand, “Buenas”. LOTO will pay for the shares in three tranches, and since the shares are primary, the money will serve as a “capital infusion” that “shall be used for the expansion of [HHR]’s business.”
MB bottom-line: We don’t know what the market thinks of this because LOTO was suspended by the PSE under the “Substantial Acquisition Rule”, which will require LOTO to remain suspended until it is able to publish a comprehensive disclosure report. But investors have been frothing at the mouth to buy LOTO stock so far in FY25, with the stock up 51% since New Year’s Day. Leaning more into the online gaming space, which can be cut and pasted to other jurisdictions rather easily, is a good move for a company like LOTO which has the vast majority of its eggs in a single basket that is tied to PCSO lottery gaming revenue. Maybe LOTO saw what DigiPlus [PLUS 26.55, down 0.9%; 129% avgVol] has done (and how it has been rewarded by investors) with its expansion into the Brazilian online gaming market? Time will tell if this is fuel for another leg up on this FY25 bull run for LOTO.
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