The consortium Ied by Israeli private equity fund the Barinboim Group has welcomed the decision by Playtech’s board to continue to support its bid for the supplier’s financial trading arm Finalto.
Playtech’s board had initially agreed to sell Finalto to the consortium in May for $210m. However, last month, rival bidder Gopher Investments emerged with a $250m counter-offer.
Yesterday, Playtech said it opened talks with Gopher – as it said it would following the postponement of its 15 July general meeting, where shareholders would have voted on the Barinboim Consortium bid.
These talks were not negotiations, but instead allowed Playtech to seek more information on Gopher, particularly regarding its ownership structure and whether this would create any regulatory difficulties in closing the deal.
While Playtech received initial answers to its questions, it said it then sent three follow-up questions that remain unanswered. Determining that it still lacked “clarity” on the Gopher bid, the Playtech board said its recommendation for shareholders to vote for Barinboim’s offer remained unchanged.
Barinboim has welcomed the continued support and said Playtech shareholders should accept the consortium’s bid given the remaining questions regarding Gopher.
“Shareholders should ask why Gopher continues to hide and should also be suspicious of Gopher’s credibility, particularly given that disclosure is crucial when buying a highly regulated business,” it said. “Furthermore, the firm associated with Gopher, TT Bond Partners, is a small boutique brokerage that raises money from Chinese investors. Gopher’s behaviour has not been well received by the market; since it first announced its interest, Playtech’s share price has fallen by nearly 17%.
“If shareholders vote against the binding agreement the consortium will fall apart. Should this happen, shareholders need to reflect on the likelihood that Gopher would follow through on its indicative interest at the level they purport to offer for Finalto.”
