Aristocrat’s proposed acquisition of Playtech has failed to secure enough shareholder backing to proceed, with the solutions giant now set to be broken up and sold off in parts.
Playtech’s board noted that it had already received and is evaluating third-party proposals for its B2B and B2C subsidiaries.
In total, 174 shareholders representing 56.13% of Playtech – or 140.5 million shares – voted for the bid at a court meeting, while 54.68% did so at a general meeting. However, both of these totals were well below the 75% threshold required for the merger to be approved.
Shareholders representing 43.87% of the business voted against the deal.
Before the meeting began today (2 February), the board acknowledged that based on proxy votes received to that point, approval looked unlikely.
At least 75% of voting shares must approve the Scheme if the 680 pence per share bid, which equates to a purchase price of around £2.70bn, is to proceed. While Playtech’s third largest shareholder Abrdn (formerly Aberdeen Asset Management) has announced its support for the acquisition, some Asian shareholders reportedly felt the offer undervalued the business.
The board said that should the deal collapse, the board’s focus would turn to maximising shareholder value by selling off Playtech’s B2B and B2C businesses, a prospect first raised last week. These would also be subject to shareholder and regulatory approval.
No definitive agreements have yet been reached and negotiations are ongoing, with no guarantee these proposals will lead to firm offers.
The B2B and B2C businesses were both performing strongly, Playtech added. Its B2B operations were growing in Europe and the Americas, driven by its Caliplay joint venture with Mexico’s Caliente.
Plans to spin off Caliplay are already in motion, through a combination and listing with a special purpose acquisition corporation (SPAC). This would be conducted in partnership with the SPAC entering a long-term commercial agreement with a leading media brand, to accelerate its entry into US states.
Snaitech, Playtech’s Italy and German-facing B2C business, is also said to be in good shape, with online operations remaining strong, and its retail business recovering from Covid-19 disruption. As a result Playtech expects adjusted earnings for 2021 to beat projections.
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 contention to acquire Playtech outright. However, both 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 across its core B2B and B2C businesses,” chief executive Mor Weizer said.
“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.”
Playtech chair Brian Mattingley added that the acquisition process had shone a spotlight on “the fundamental premium value of [its] businesses”.
“Playtech is the leading technology company in the gambling industry, with an unrivalled quality and breadth of products,” he continued. “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.”
Aristocrat has responded to express its disappointment that its offer is set to lapse, saying it had done its utmost to engage with shareholders.
In particular chief executive Trevor Croker blamed a group of shareholders that built a blocking state and refused to engage with either Aristocrat or Playtech for the deal’s spending collapse.
However, the supplier said it remained committed to accelerating its growth in the real-money online gaming sector, and would assess alternative acquisition targets.
Shares in Playtech were trading up 0.95% at 582.50 pence per share in London this morning.
