Playtech Takeover Saga Rumbles On

Playtech Takeover Saga Rumbles On

The Playtech takeover saga has taken another turn. Next week sees their shareholders voting on the deal with Aristocrat Leisure Limited. Now Playtech have had to respond to a report on Sky News that their company could break up if shareholders don’t approve the deal.

According to Sky News, Playtech would sell off their business-to-business division and their Italian consumer arm Snaitech if the deal with Aristocrat falls through. Feb 2 sees shareholders cast their votes on the deal agreed last October that is believed to be worth £2.7 billion.

The Playtech directors have already given a unanimous yes to the deal. They believe that it will provide “certainty and liquidity” to the tech giant. However, developments since then have cast some doubt on how the Playtech shareholders will vote. Some investors have according to Playtech not “engaged meaningfully about their views on the Aristocrat offer.”

In response to the Sky News report, Playtech governance said that their Board of Directors still recommend accepting the deal. While the company has made “significant strategic and operational progress,” the Aristocrat bid “provides an attractive opportunity for shareholders to accelerate the delivery of Playtech’s longer-term value.”

Approval of Shareholders Needed

75% of the Playtech shareholders need to approve the deal. However, most interest is being focused on Asia-based shareholders who have recently been increasing their holding in the company. They own around a quarter of Playtech stock, so if they don’t like the offer, it is unlikely that it will be accepted.

Last week saw another development when JKO Play withdrew their interest in making a bid for Playtech. That was a business that was led by the former F1 team owner Eddie Jordan and gambling industry veteran Keith O’Loughlin.

They had expressed an interest in Playtech and given due diligence. They had been given more time to make a formal offer hence the delay in the date of the decisive Playtech shareholders meeting. However, Jordan is no longer in the race, and it’s believed the recent Asian investment in Playtech was a reason for that decision.

There had also been interest from Gopher Investments. They had purchased Finalto (the financial trading division of Playtech) in December 2020 but also decided against making a bid for the rest of the company.

Now Playtech await the result of the February 2 shareholder meeting. The big question remains though, what will happen if the Aristocrat Leisure Limited deal is not approved by them. Playtech had been hoping the second quarter of this year would see a takeover deal completed. Next week will go a long way to determining whether that is a realistic target.