Playtech investors reject Aristocrat’s $2.8 billion takeover bid

abdelaziz Fathi

Australian slot machine maker Aristocrat’s $2.8 billion offer to acquire Playtech’s business collapsed on Wednesday after a majority of the gambling software company’s shareholders rebuffed the deal.

Playtech shareholders have seemingly argued the 680-pence-per-share offer undervalued the business and rejected the deal at a special meeting. Namely, 45% of votes cast were against the potential transaction, which was enough to end Aristocrat’s takeover battle for the gambling technology firm.

As a result, Playtech has terminated its purchase agreement with the Australian slot machine supplier, paving the way for other offers. With this agreement lapsed, Playtech is now permitted to enter into formal negotiations with other interested parties.

In an attempt to break the deadlock, the company board said they are actively considering “its options for maximising shareholder value.” However, they didn’t confirm if they were engaging in negotiations with other bidders nor if there is a proposal already on the table to acquire the business.

“Earlier today, Playtech Plc convened the Court Meeting and General Meeting in connection with the recommended cash offer made by Bidco (a wholly owned subsidiary of Aristocrat). The total votes in favour of the resolutions were 56.13% at the Court Meeting and 54.68% at the General Meeting, which were below the minimum threshold (75% of those shares voted) needed to approve the resolutions. Accordingly, the acquisition of Playtech by Bidco has been terminated and the Scheme has lapsed. As a result, Playtech is no longer in an offer period as defined by the City Code on Takeovers and Mergers,” the company said in a regulatory filing.

Jordan’s consortium dropped a bid thought to be worth $3 billion

Mor Weizer, CEO of Playtech added: “Playtech remains in a strong position and continues to perform very well across its core B2B and B2C businesses. 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.”

Aristocrat Leisure was the only bidder in the three-way race for Playtech after JKO Play, a consortium led by former Formula 1 boss Eddie Jordan and gambling industry veteran Keith O’Loughlin, had pulled out.

Jordan told the Financial Times that he was concerned that a group of Asian investors, who recently bought a stake in the London-listed gambling software developer, would block the deal.

JKO Play was the third suitor to express an interest in buying Playtech, which makes software for online casinos, poker rooms, sports betting and other gambling sites.

But after Gopher Investments walked away and shelved its $4.0 billion buyout of Playtech, JKO consortium was bidding against Australia’s Aristocrat Leisure which was the first to unveil bid for the gambling technology business. The $30 billion ASX-listed company reminded shareholders that its offer provides “full and fair value with attractive cash certainty,” but to no avail.

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