Bragg investor activists call for full sale to maximize value

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Bragg Gaming Group has been encouraged to seek a full or partial sale of the business in a bid to maximize shareholder value by one of its key investors. 

Jeremy Raper, Founder & Head of Research at Raper Capital, one of Bragg’s long-term investors, has written an open letter to Bragg CEO Matevz Mazij suggesting that a sale would ‘deliver a gargantuan premium’ to investors.  

Raper stated that while Bragg’s revenue has quadrupled in the five years since transitioning from Oryx Gaming, the stock price has dropped.

In the last five years, Bragg – which has a presence in North America via Ontario and is listed in Canada – has seen revenue growth from €26m to €97m, with adjusted EBITDA rising significantly from €1.2m to €16.5m. However, throughout this period, the company’s stock price dropped 25%. 

Launching a bid to execute a third-party sale of the business as “the only way to crystallize a proper return for the underlying business” that Bragg has created, Raper cites that entities managed by Raper Capital are “beneficially interested” in purchasing 375,000 shares. 

Raper wrote: “A sale of the company should deliver a gargantuan premium and certainty of value. As such, it is evidently clear that a third-party sale of the business is the only way to crystallize a proper return for the underlying business value that you, and legacy management, have created. 

“I believe most other minority shareholders would not only support this initiative but indeed agree with my contention that such an initiative is the last, best course available to the company.”

While calling for a material change in ownership structure at Bragg, Raper stated his firm will remain a committed investor. 

Yet he identified several benefits of spinning part or all of the business, such as a vast return on investment to shareholders, referring to Bragg paying Executives and Directors millions in CAD compensation in FY2022. 

Bragg Gaming Group is dual-listed on both the NASDAQ and Toronto Stock Exchange

Concluding his letter to Mazij, Raper wrote: “What you have built, first at Oryx and now at Bragg, constitutes a highly desirable, unique suite of igaming content and distribution assets that, for various reasons, has been ignored by the public markets for far, far too long – a stasis that, if uncorrected, may actually compromise the company’s continued bright growth prospects and risk much of the value you have created thus far. 

“By calling for a sale of the company now, I only seek to preserve, and finally unlock, that latent value for the benefit of all stakeholders.”