TALLINN - A preliminary agreement on the buyout of Admiralu Klubs by the Latvian subsidiary of the Olympic Entertainment Group was suddenly canceled for unexplained reasons.
According to the deal, signed October, Olympic Casino Latvia was supposed to purchase 100 percent of Admiralu Klubs, the ubiquitous bar and slots hall in Latvia's cities and towns.
The preliminary sum of the deal was set at 625.9 million kroons (40 million euros), according to reports.
It was not clear why the deal was canceled, but the companies did announce that they would continue talks and try to agree on acceptable terms.
In a statement to the Tallinn Stock Exchange, the Olympic group said that on Oct. 26, 2007 its Latvian subsidiary had inked a preliminary agreement with Admiralu Klubs on acquiring 100 percent of the latter's stock, but now Olympic Casino Latvia "would not proceed with the acquisition of the casino operator Admiralu Klubs on the terms constituted in the preliminary agreement."
According to the statement, "consultations will continue in order to find conditions suitable for both parties."
Previously the Olympic Entertainment Group had explained that it wanted to expand its activities and strengthen its position on Latvia's gambling market. The acquisition of Admiralu Klubs would allow it to significantly increase turnover. Its market share would increase to some 25 percent.
Currently the Olympic group manages more than 4,000 slot machines, and after the deal it will have an additional 2,200 slot machines in Latvia.
The Olympic Entertainment Group posted 2.5 billion kroons in revenues (160 million euros) in 2007, while Admiralu Klubs in 2006 generated 13.4 million lats (19.1 million euros) in sales and earned 2.4 million lats in profit.