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Fortuna Entertainment Group announces intention to float on the Warsaw and Prague stock exchanges

Not for release, directly or indirectly, in the United States of America, Australia, Canada or Japan.

The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States or to US persons unless the securities are registered under the Securities Act, or an exemption from the registration requirements of the Securities Act is available. No public offering of the securities will be made in the United States.

AMSTERDAM (29 September 2010) – Fortuna Entertainment Group N.V. (“Fortuna” or the “Company”), the largest (by turnover) Central and Eastern European operator of fixed-odds betting, announces its intention to conduct a public offering and subsequent listing of its shares on the Warsaw Stock Exchange (WSE) and the Prague Stock Exchange (PSE).

The Offering, if made, would include a public offering in Poland, the Czech Republic and Slovakia, and a private placement with institutional investors in selected jurisdictions outside the Czech Republic, Poland and Slovakia. The Offering should be concluded by the end of 2010.

Jiří Bunda, Chairman of the Management Board and CEO of Fortuna Entertainment Group, commented: „The intended listing of Fortuna in our key countries is another significant chapter in the history of Fortuna. In the course of the last 10 years, we have become an international company, after growing from what was originally a local company. Currently, we are a leading bookmaker in the region, which is setting new trends in its area of business. For very many consumers, our name has become the very definition of bookmaking, and not only in the Czech Republic. The flotation will enable us to gain resources for further development projects that will support our growth strategy. It will also help Fortuna’s customers to become our shareholders and strengthen our long-term partnership and cooperation with them.”

Michal Horáček, a Member of the Supervisory Board of Fortuna Entertainment Group, said: “Fortuna pioneered bookmaking in the Czech Republic and in Poland it taught participants how to bet when it arrived in the country 14 years ago. In Slovakia, Fortuna became the first company to provide live betting. Now, once again, we will be pioneers, this time as the first bookmaker to be listed in Poland and the Czech Republic. It is a pleasure to be on board and to serve shareholders by contributing my view on how Fortuna is and should be developing.”

Wilf Walsh, Vice Chairman of the Fortuna Management Board and a Non-executive Director of Gala Coral, the third largest bookmaker in the UK, added: "When I met with Fortuna for the first time some two years ago, it was clear that their impressive growth story, brand heritage and huge market potential would make for a successful IPO story. In the UK betting and gaming industry, bookmakers are firmly positioned as key players in the discretionary consumer leisure sector and the major operators are listed on the London Stock Exchange and are part of FTSE 250 Index. Central Europe will undoubtedly evolve in a similar cycle as both retail and online sports betting become more popular with the low-staking consumer. Fortuna Entertainment Group is focused on market leadership in the region and is committed to being a major employer that operates in a progressive, regulated environment committed to social responsibility."

The Fortuna management is confident that Fortuna would become a stock with a robust dividend payout (envisaged at 50-100% of net income) and exciting growth potential on the back of new initiatives of the Company – the FortunaWin offshore online platform, online betting in Poland and further expansion of its product and service portfolio.

Jozef Janov, Chairman of the Supervisory Board of the Fortuna Entertainment Group and a representative of Penta investment group, the sole shareholder of Fortuna, said: „Penta has been present in Fortuna for five years and we are very satisfied with the results achieved jointly with Fortuna’s management. We believe that Fortuna will continue its strong fundamental organic growth. The intended entry on to the stock exchange confirms the credibility of Fortuna’s story and its leading position on the Central European market. It will also allow other investors and clients of Fortuna in all countries where it is present to participate and benefit from the success of the Company. For Penta, through the intended flotation we make a partial exit, but we still retain a significant shareholding in order to participate in the further growth of the business.”

UniCredit Bank AG is acting as the Sole Global Coordinator and Sole Bookrunner of the offering, with Erste Group Bank AG acting as Joint Lead Manager for this transaction. UniCredit CAIB Poland S.A. would act as the Polish retail manager, Centralny Dom Maklerski Pekao S.A. and Dom Maklerski Pekao S.A. would act as Polish selling agents. Česká spořitelna, a. s., would act as the offering manager for retail investors in the Czech Republic, while Brokerjet, of Česká spořitelna, would serve as the authorised broker in the Czech Republic. Slovenská sporiteľňa, a. s., would act as the Offering manager for retail investors in Slovakia.

Prior to going public, the Offering would be subject to all required registrations, approvals and notifications with all the relevant regulatory authorities, in particular with Autoriteit Financiële Markten (AFM), the Netherlands Authority for the Financial Markets, the Czech National Bank (ČNB), the Polish Financial Supervision Authority (KNF) and the Slovak National Bank (NBS). The intended listing of the stock is subject to approval by the Prague Stock Exchange and the Warsaw Stock Exchange.

About Fortuna Entertainment Group:

Fortuna Entertainment Group is the largest Central and Eastern European operator of fixed-odds betting, measured by total amounts staked in retail points of sales. Established in 1990 in the Czech Republic, the Company has gradually grown into a multinational group expanding on the Slovak, Polish and Hungarian markets.

Fortuna has become the standard-setter and trend-setter in the fixed-odds betting segment due to its established 20-year track record on the Central European market. The group continuously invests in the development of new products and the expansion of its retail distribution channels. The Group aims to bring entertainment to customers who love sport – to those who pursue sport activities, follow sport events, and bet on their favourite teams and players. Fortuna currently operates more than 1,300 betting outlets in three countries.

The Company’s strong position is supported by a team of experienced bookmakers with thorough knowledge of the local markets as well as a broad and in-depth understanding of the sport we follow globally. The Company operates a sophisticated risk management platform based on original know-how and the best available international technologies.

Key financial data

The 2010 first half results of Fortuna Entertainment Group (Fortuna) show that the leading Central European fixed-odds betting operator continues to grow successfully. Fortuna, present on the markets of Poland, the Czech Republic, Slovakia and Hungary, saw its total bets received (Amounts Staked) for the reporting period increase by about 12 percent to almost EUR 192 million, according to interim financial statements

The 2010 first half Gross Win grew by 10 percent to EUR 45.4 million, compared to EUR 41.1 million while recurring EBITDA increased y-o-y by 4 percent to EUR 11.6 million compared to EUR 11.2 million in the first half of 2009.

The good half-year results were driven in particular by the ever-increasing contribution of  online betting, particularly further development of “Live betting” (real-time bets placed during particular games or events) in the Czech Republic and Slovakia, and by focusing on the streamlining of retail operations across all markets.

Last year, the company received EUR 338 million in bets in 2009, confirming its leading position in the region. The 2009 result represents a 5 per cent year-on-year improvement, compared to the EUR 322 million in total bets received in 2008. Adjusted EBITDA was EUR 24.9 million in 2009, compared to EUR 24.4 million in the preceding year. Net profit increased by 5.5 percent on the 2008 result to EUR 16.9 million.

Business strategy

Fortuna Entertainment Group’s growth strategy builds on online betting, a segment in which the company sees considerable potential, and also targets a strengthening of its retail platform by increasing the volume of bets received per shop. Furthermore, the Company aims to expand its product and distribution channel portfolios, supported by increased customer trust and loyalty. An important milestone for the company was gaining a license for the operation of a lottery in the Czech Republic in July 2010. The Company is also concentrating on seeking out opportunities for entering new markets. Further potential expansion opportunities are highly dependent on the regulation of the betting and gaming sector on the target markets.

Competitive advantages

The company believes its key strengths are as follows:

  • Established and trusted brand with a 20 year track record
  • Significant market positions in the Czech Republic, Slovakia and Poland
  • Two-pronged distribution platform with a wide-ranging product offering
  • Strong dividend payout supported by high cash generation
  • Superior risk management and profit protection platform
  • Online market growth
  • Strong management team with experience in sport betting and retail

The selling shareholder

Currently, Penta Investments Limited, registered in Limassol, Cyprus. The beneficial owner of the company is one of the largest Central European investment groups, operating in private equity and real estate investment.

For more information, please contact:

Fortuna Entertainment Group N.V.
Vladan Crha
Tel.: +420 739 607 562
email: [email protected]

Bison & Rose
Vladimír Bystrov
Tel.: +420 777 130 788
email: [email protected]

Genesis PR
Eliza Misiecka
Tel.: +48 601 073 735
email: [email protected]

Disclaimer

This publication is for promotional purposes only and under no circumstances shall it constitute the basis for a decision to invest in securities of Fortuna Entertainment Group N.V. (the “Company”). The offering prospectus (the “Prospectus”) prepared in connection with the offering and admission of the Company’s shares to trading on the Prague Stock Exchange (the “PSE”) and the Warsaw Stock Exchange (the “WSE”) is the sole legally binding document containing information on the Company and the public offering of its shares in the Czech Republic, Poland and Slovakia (the “Offering”).

The Prospectus was submitted for approval to Autoriteit Financiële Markten (“AFM”), the Netherlands Authority for the Financial Markets, and will be made available to the public once approved and all the conditions provided under Art. 37 of the Polish Public Offering Act dated 29 July 2005, under Art. 125d(2) of the Slovak Act No. 566/2001 Coll. on Securities and Investment Services and on Amendment to and Supplementation of Certain Acts (Act on Securities), as amended, and under Art. 36f(1) of the Czech Act No. 256/2004 on Undertakings in the Capital Market are met, i.e., once the Polish Financial Supervision Authority has been notified by the AFM of the approval of the Prospectus and has received a certificate of the approval of the Prospectus along with the Prospectus and a translation of its summary into Polish and the Czech National Bank has been notified by the AFM of the approval of the Prospectus and has received a certificate of the approval of the Prospectus along with the Prospectus and a translation of its summary into Czech and the National Bank of Slovakia has been notified by the AFM of the approval of the Prospectus and has received a certificate of the approval of the Prospectus along with the Prospectus and a translation of its summary into Slovak.

The Prospectus in electronic form will be available on the following websites: of the Company (www.fortunagroup.eu), of the Slovak Retail Manager in Slovakia (www.slsp.sk), of the Czech Retail Manager in the Czech Republic (www.csas.cz), of the Warsaw Stock Exchange (www.gpw.pl), and of the AFM (www.afm.nl). Printed copies of the Prospectus will be available at the Company’s offices and at the registered offices of the offering agent in the Czech Republic, Slovakia and Poland and at customer service points of the offering agents in Slovakia and in Poland.

History of the Company

The founding company of FORTUNA sázková kancelář, a. s., was established in 1990 in Prague. A sister company Terno, a. s., was founded in Slovakia a year later. In 2005, Penta became the owner of both companies and acquired the Polish betting operator Profesjonał in the same year. All the firms gradually merged under the same brand.

Management

Fortuna employs a two-tier management model: the Board of Directors is the executive body and it is overseen by the Supervisory Board. There are currently four directors in the top management of the company. The Board of Directors is headed by Jiří Bunda who has previously held positions in the management of, among other companies, Zepter International. The Vice Chairman of the board is Wilf Walsh, an expert with broad experience in entertainment and betting businesses. The other Board Members are Jana Galacová and Richard van Bruchem. The Supervisory Board comprises four Members. It is chaired by Jozef Janov from Penta who has significant experience in managing retail networks, gained from his Chairman of the Supervisory Board position at Žabka, the biggest convenience retail network in Central Europe. The other Supervisory Board Members are Václav Brož, Martin Kúšik, and Michal Horáček, one of the founders of the original Czech Fortuna, who was recently appointed as the fourth Board Member. It is envisaged that the fifth Member of the Supervisory Board will be elected as a nominee of the minority shareholders.

Corporate Governance

The Company implements and maintains management standards in line with international requirements. The Company intends to operate in accordance with corporate governance principles valid in the Czech Republic, Poland and the Netherlands.

MEDIA CONTACTS

Petr Šrain

PR manager, Spokesperson
Tel.: +420 267 218 195
Mobil: +420 739 607 527
E-mail: [email protected]

These contacts are primarily for journalists. Therefore, unfortunately, we can not guarantee that we will be able to react to non-media enquiries within the desired deadline. If you are a Fortuna customer, you can also send your question to [email protected] or connect with us some other way. Thank you for your understanding.