Cherry acquires betting exchange betsson.com 

3 March 2005

Cherry’s board has decided to immediately convert its convertible loans and call in all options in the British Internet gaming company Betsson. The transactions will mean that Cherry will obtain 100% ownership of Betsson.

Cherry became a partner in Betsson betting exchange when the company was in an early stage of development. During this time an option agreement was signed with favourable terms.

The agreement includes several different convertible loans and options. This means that Cherry has invested a total of Euro 3.45 million to obtain a 71% ownership in the company. Of this Euro 3.45 million, Euro 3.1 million has already been paid through a combination of share purchases and convertible debenture loans.

The remaining Euro 0.35 million, which will now be paid in cash, together with converting loans, will give Cherry 71% ownership. The called-in options mean that Cherry will also acquire the remaining 29% of Betsson at market value, to be determined by a valuation from two independent external parties.

Cherry’s board believes that there is a lot growth potential for sport betting through the type of betting exchange that Betsson operates. The betting exchange offers advantageous conditions for the players (better odds), and the operation can be run with a comparatively small organisation. Betsson’s competitiveness is considered to be quite good compared with the type of games provided by state-run gaming companies.

As a result of this acquisition, Cherry will be reorganising its Internet gaming operations. Cherry’s shareholdings in companies that run Internet gaming operations will be collected in a new area of operations called Cherry Online. Cherry’s subsidiary, Net Entertainment, which is purely a development company, will be accounted for separately.