Shareholders reject Aristocrat’s Playtech offer – M&A

Aristocrat’s proposed acquisition of Playtech has failed to garner enough shareholder support to proceed, with the solutions giant now set to be broken up and sold in parts.

Playtech’s board noted that it had already received and was evaluating third-party proposals for its B2B and B2C subsidiaries.

A total of 174 shareholders representing 56.13% of Playtech – or 140.5 million shares – voted for the offer at a court meeting, while 54.68% did so at a general assembly. However, both of these totals were well below the 75% threshold required for the merger to be approved.
Shareholders representing 43.87% of the company voted against the transaction.

Prior to the start of today’s (February 2) meeting, the Board acknowledged that, based on the proxy votes received at this stage, approval appeared unlikely.

At least 75% of voting shares must approve the scheme if the offer of 680p per share, equivalent to a purchase price of around £2.70billion, is to go ahead. While Playtech’s third-largest shareholder, Abrdn (formerly Aberdeen Asset Management) announced its support for the acquisition, some Asian shareholders reportedly felt the offer undervalued the company.

The board said that if the deal fails, the board would focus on maximizing shareholder value by selling Playtech’s B2B and B2C businesses, a prospect first mooted. last week. These would also be subject to shareholder and regulatory approval.

No final agreement has yet been reached and negotiations are ongoing, with no guarantee that these proposals will result in firm offers.

Both B2B and B2C businesses performed well, Playtech added. Its B2B operations were developing in Europe and the Americas, driven by its Caliplay joint venture with the Mexican Caliente.

Plans to spin off Caliplay are already underway, through a combination and listing with a Special Purpose Acquisition Company (SPAC). This would be conducted in partnership with SPAC entering into a long-term commercial agreement with a leading media brand, to accelerate its entry into US states.

Snaitech, Playtech’s B2C business in Italy and Germany, is also reportedly in good shape, with online operations remaining strong and its retail business recovering from Covid-19 disruptions. As a result, Playtech expects adjusted earnings for 2021 to beat forecasts.

The sale of its financial trading division Finalto, meanwhile, is expected to be completed in the second quarter of 2022, once it receives regulatory clearance. The acquirer, Gopher Investments, was briefly in the running to acquire Playtech outright. However, Gopher and another rival bidder, Keith O’Loughlin and Eddie Jordan’s JKO Play, withdrew from the race.

“Playtech remains in a strong position and continues to perform very well in its core B2B and B2C businesses,” Chief Executive Mor Weizer said.

“These advancements reflect the quality of our technology and products as well as the hard work and commitment of our talented team. We remain confident in our long-term growth prospects and, in particular, in our ability to benefit from the structured agreements (including Caliente) which are already giving Playtech access to newly opened games markets.

Playtech Chairman Brian Mattingley added that the acquisition process highlighted “the fundamental value of the premium of [its] companies”.

“Playtech is the gaming industry’s leading technology company, with unparalleled quality and product range,” he continued. “Snai is the number one sports brand for retail and online betting in the Italian market.

“In the event Aristocrat’s offer does not materialize, the Board of Directors is committed to pursuing options to maximize value for all shareholders and accelerate the validation of that value.”

Aristocrat responded to express his disappointment at the expiration of his offer, saying he had done everything possible to engage with shareholders.

In particular, chief executive Trevor Croker blamed a group of shareholders who built a blocking state and refused to engage with Aristocrat or Playtech for the deal’s spending collapse.

However, the provider said it remains committed to accelerating its growth in the real-money online gaming business and will evaluate other acquisition targets.

Shares of Playtech were trading up 0.95% at 582.50 pence per share in London this morning.