The board of Playtech Plc has this morning communicated that its designated £2.7 billion sale to Aristocrat Leisure will likely be rejected by shareholders.
The statement follows proxy votes ahead of today’s official vote on Aristocrat’s bid, that have failed to meet the minimum threshold 75% of votes cast needed for Playtech governance to approve the transaction.
ASX-listed Aristocrat began its pursuit of Playtech last October, securing new funds to propose a £2.7 billion cash and shares bid to acquire Playtech outright – a deal instantly recommended by Playtech’s board.
Voting on Aristocrat’s deal was twice delayed, as Playtech was forced to review pending bids by JKO Play the investment vehicle of former Formula 1 executive Eddie Jordan, that failed to materialise any counteroffer.
Delays saw speculation mount, that a collective of Asian investors would reject Aristocrat’s bid, placing pressure on Playtech’s board to pursue an alternative route to selling the FTSE250 technology group’s assets.
This morning Playtech governance outlined that it has reviewed options for maximising shareholder value in a scenario where the Aristocrat offer does not proceed and lapses”.
This has led to an evaluation of M&A proposals in respect of a potential break-up of the company’s B2C and B2B businesses, which would also be the subject to shareholder approval, as well as regulatory and other clearances.
“Shareholders are advised that no definitive agreements have been reached and negotiations are on-going, and there can be no certainty that any definitive agreement will be reached,” it adds.
Playtech Chairman Brain Mattingley, commented “This process has shone a spotlight on the fundamental premium value of Playtech’s businesses.
“Playtech is the leading technology company in the gambling industry, with an unrivalled quality and breadth of products.
“Snai is the number one sports brand across retail and online betting in the Italian market. In the event that the Aristocrat offer does not proceed, the board is determined to pursue options to maximise value for all shareholders and accelerate validation of that value.”
Furthermore, Playtech, which expects close the sale of its Finalto financial services division during Q2, asserts that trading, since its last update on November 12, 2021, has “continued to see a strong trading performance” across its core business.
B2B has witnessed growth across the Americas as well as in Europe, with online strength and recovery in the Snaitech retail division driving B2C. As a result, adjusted EBITDA for the year is expected to exceed management expectations
Mor Weizer, CEO of Playtech, noted: “Playtech remains in a strong position and continues to perform very well across its core B2B and B2C businesses.
“This progress reflects the quality of our technology and products and the hard work and commitment of our talented team.
“We remain confident in our long-term growth prospects and, in particular, our ability to benefit from the structured agreements (including Caliente) that are already allowing Playtech to access newly opened gaming markets.”