Playtech agrees to Gopher Investments’ $250 million offer to buy Finalto
Playtech has agreed to sell its Finalto brand to Gopher Investments, which confirmed its $250 million bid to acquire the supplier’s financial trading division.
The gambling and financial trading company had entered into a binding agreement to sell Finalto to its second-biggest shareholder, who had clashed with the company over Barinboim Group-led consortium’s $210 million offer.
The deal’s completion is subject to approval by shareholders and regulatory clearances, the company said. Gopher said they welcome “the unanimous support” of the Playtech Board and expects to complete the transaction in H1 2022.
Teresa Teague, Partner at TT Bond Partners, commented:
“Gopher has been impressed by the strength of Finalto’s business and management team and looks forward to working closely with the team to support the business in this exciting next stage of its evolution. As a major shareholder in Playtech, Gopher is pleased to conclude a transaction delivering value for all shareholders and looks forward to working with the Playtech Board and continuing its constructive dialogue to support growth.”
Playtech agreed in May with a Barinboim Group-led consortium to acquire the London-listed firm’s financial trading arm. However, the proposed $210 million bid for Playtech’s financial division Finalto collapsed in August after a majority of the gambling software company’s shareholders rebuffed the deal.
Playtech shareholders argued that the offer undervalues the business and rejected the deal at a special meeting. As a result, Playtech has terminated its share purchase agreement (SPA) with the consortium led by Israel’s Barinboim Group.
In an attempt to break the deadlock, the company has engaged in negotiations with its major shareholder Gopher Investments regarding a proposal already on the table to acquire the business.
Gopher Investments, which holds a 4.97% stake in the gambling-technology provider, proposed to pay $250 million to acquire the unit. The business also offered to pay a break fee of $10 million to Playtech if the board changed its recommendation away from the consortium, but was nevertheless rejected.
Playtech raised questions with Gopher as part of its due diligence into the sweetened offer, adding that the bid is uncertain because it is non-binding and subject to a number of conditions. Based on this assumption, the FTSE 250-listed group didn’t change its recommendation, particularly as it didn’t receive interest in Finalto from other potential acquiring parties.
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.