TVG declines Youbet.com stock option

Television Games Network has decided against exercising an option that would have allowed the company to purchase a majority stake in Youbet.com, officials for the two companies said Thursday.

TVG, a broadcast network and account-wagering service, was entitled to purchase 21.6 million shares in Youbet under an agreement reached between the companies three years ago. The stake, which would have cost $36.5 million at $1.69 a share - well below Youbet's current stock price - would have given TVG a 51 percent share of Youbet.

TVG already owns 4 million shares in Youbet, and in deciding against the option, TVG will receive one million newly issued shares in the company. Altogether, the shares will represent a 20 percent stake in the company.

Youbet's stock was up 55 cents on Thursday, or 15.1 percent, to $4.19. Youbet's 52-week high is $4.48.

Although Youbet.com and TVG compete for account-wagering customers, the two companies have an agreement that allows Youbet to offer wagering on signals from racetracks that have exclusive agreements with TVG.