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Opap Rises as Much as 4.5% After Monopoly Extension, License

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Sept. 30 (Bloomberg) -- Opap SA, Europe’s biggest listed gambling company, advanced as much as 4.5 percent in Athens trading after it agreed pay the Greek government 935 million euros ($1.3 billion) for an extension of its betting monopoly and a video lottery terminal license.

The 10-year extension will cost 375 million euros, according to an Athens bourse filing today. Opap will also pay the state 5 percent of gross profit for the period through through October 2030. The license to operate 35,000 terminals will cost 560 million euros.

“Although slightly above previously suggested figures the price-tags are positive for Opap, improving visibility and crating value for the company,” Paris Mantzavras, an analyst at HSBC Pantelakis Securities in Athens, said by telephone today.

Opap rose 4.1 percent to 7.86 euros at 1:57 p.m., advancing for a fifth day. Opap declined 39 percent this year.

Greek Finance Minister Evangelos Venizelos said last week he’ll raise 1.4 billion euros in September and meet a third-quarter target of 1.7 billion euros next month, as the nation struggles to meet goals set by the European Union and International Monetary Fund under the terms of a May 2010 bailout. Greece aims to raise 50 billion euros through 2015 to help pay down debt.

Opap, of which the Greek state owns 34 percent, holds a monopoly on sports betting in the country until 2020. The company will pay 474 million euros of the total terminal license value as soon as the final deal is signed and 86 million euros over 24 months after the permit is issued, according to the filing.

Under new gaming legislation Opap was granted the right to a license to operate 35,000 video-lottery terminals, of which 18,500 have to be subcontracted. The bill came into effect Aug. 22.

A general meeting will be called soon to obtain shareholder approval, according to the bourse filing. The Hellenic Republic Asset Development Fund’s board needs to approve the deal, the company added in an e-mailed statement today.

To contact the reporter on this story: Natalie Weeks in Athens nweeks2@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net

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