Gopher, Barinboim consortium react to Playtech vote on Finalto sale

abdelaziz Fathi

Gopher Investments said Thursday that it welcomes Playtech PLC’s shareholders veto against Barinboim Group-led consortium’s $210 million offer to buy Finalto. However, the consortium has not seemingly given up on buying the financial-trading arm.

Gopher, which has about a 5.0% stake in Playtech, added in a subsequent statement that it looks forward to engaging with the company’s board regarding its $250 million bid for the unit.

The minority shareholder had lodged its higher bid for Finalto back in July, rivalling the Barinboim offer. However, Playtech’s board cited Gopher’s lack of clarity for rejecting its offer, ultimately opting to continue with the Barinboim takeover.

More specifically, the board raised concerns with Gopher about its ownership structure and certain regulatory obstacles, adding that it has questions about their links to China. At the time, Gopher alleged to have responded promptly to Playtech’s request for additional information regarding finances and regulatory matters. It also remarked that it would only need to perform very limited due diligence due to the existing relationships with  Playtech.

On their part, the consortium was also quick to react to the news and expressed extreme disappointment in the shareholders of Playtech’s decision to reject its offer for Finalto.

The group issued a statement that said it does understand “the predicament faced by shareholders and certain parties,” notably advisory firms Institutional Shareholder Services and Glass Lewis, when assessing the situation. Ahead of the vote, these proxy advisors called shareholders to reject the bid.

However, the consortium agreed to Playtech’s request to remain together for a further 30 days as they are confident that negotiations will be eventually resumed.

The move enables the online gaming and gambling software provider to negotiate with Gopher or any other buyer and to ascertain whether their interest is indeed genuine, they added.

“If Playtech has not managed to enter into a fully binding agreement with Gopher within the next 3 weeks, it will be clear that Gopher’s interest is not genuine and the only credible transaction capable of concluding in the near term would be to the Consortium, which has already been recommended by Playtech multiple times,” explains the consortium led by Israel’s Barinboim Group.

All told, Playtech said its strategy remains to refocus on its core gambling business by selling Finalto for “the maximum available proceeds.”

Playtech’s trading technology division has become a lucrative target this year as increased market volatility, led by Covid-19 chaos, boosted revenue. However, before that Playtech trimmed its profit guidance due to highly challenging trading conditions and a regulatory crackdown on risky trading products.

Finalto’s business includes TradeTech Alpha, created to deliver a B2B solution, Markets.com, a provider of CFD and FX trading to retail investors, and MarketsX, a dedicated B2C brand for high-net worth clients. Furthermore, it includes CFH Group, which Playtech acquired in 2016 in a $120 million deal.

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