Gopher Investments abandons $4.0 billion takeover bid for Playtech

abdelaziz Fathi

Gopher Investments has shelved its $4.0 billion buyout of Playtech, the London-listed gambling software developer. Playtech’s second-largest shareholder, however, will go ahead with its $250 million bid to acquire Finalto unit even after its interest in a bigger deal cooled.

Neither Gopher nor Playtech explained exactly why the deal talks collapsed, but Gopher said in a separate statement that its board had decided not to make an offer, less than a month after first declaring its interest in a takeover.

“Today’s announcement has no bearing on Gopher’s agreement to acquire Playtech’s financial trading division, Finalto. Gopher remains fully committed to the acquisition. The process is ongoing and is expected to complete in H1 2022,” Gopher said.

In a statement to the stock market, Playtech confirmed that on October 21 it received a preliminary approach from Gopher Investments seeking access to due diligence information in order to explore a possible offer.

Under UK takeover rules, Gopher Investments, a consortium of Asian and American investors, cannot make another bid for the FTSE 250-listed gambling software business for six months unless there is a competing offer.

The takeover battle for Playtech has been heating up after a consortium called JKO Play, led by former Formula 1 boss Eddie Jordan and gambling industry veteran Keith O’Loughlin said they are mulling a takeover bid.

JKO Play was the third suitor within a month to express an interest in buying Playtech, which confirmed that the new bidder had requested access to due diligence information before a possible bid.

After Gopher walked away, JKO consortium is now up against Australia’s Aristocrat Leisure which unveiled a $2.89 billion bid for the gambling technology business.

There has been frenetic dealmaking in the gambling industry since the US supreme court legalized sports betting as companies look to tap expertise of online gaming software suppliers operating in more developed markets such as the UK.

At the time, Aristocrat said the deal would unlock opportunities in the fast-growing online real money gaming segment as they continue to open up, particularly in North America. The company’s CEO also referred to taking advantage of the de-regulating betting and gaming market in the United States.

Playtech’s shareholders will convene on December 1 to vote on a bid from Gopher Investments to buy the company’s financial trading division Finalto. On August 18, Playtech’s general meeting rebuffed a proposed $210 million to sell Finalto to a consortium led by Israel’s Barinboim Group.

Elsewhere, Playtech will seek shareholder approval on January 12 to proceed with its proposed sale to Aristocrat Leisure.

Separately, Playtech said Citibank will join other lenders that would finance Aristocrat’s possible buyout, which would be made through its subsidiary Bidco. The Australian company said it would fund the deal with a combination of existing cash and new debt alongside equity raising of nearly $960 million.

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