Mauritius betting firm ASL buys partner to cut costs

Mauritius betting systems operator Automatic Systems Limited (ASL) agreed to buy its business partner HH Management Ltd (HHM) to cut fees, boosting its shares.

ASL, which operates betting systems for horse racing and soccer matches on the Indian Ocean Island, said on Tuesday it would buy HHM for 74.5 million rupees ($2.7 million).

Shares in ASL jumped 6.7 percent to 126 rupees following the announcement of the acquisition that ASL said was intended to cut fees currently payable to HHM.

"Investors feel the take-over will enable savings of fees and ASL will also benefit from higher margins. The horse racing season has just started and this might also explain the interest for the company," Imrith Ramtohul, Head of Investment at Mauritius Union Assurance said.

ASL, which posted a pretax profit of 27.6 million rupees last year, has a market capitalisation of 417 million rupees and had assets worth 60 million rupees at the end of last year.