Aristocrat’s Playtech takeover bid is likely set to collapse
Playtech’s £2.7 billion sale to Australian slot machine maker Aristocrat is on the verge of collapse.
The London-listed gaming group warned that proxy votes received to date show the deal is unlikely to win investor approval. The final results of a shareholder vote will be announced later today. The Australian gambling group’s offer is now expected to lapse, forcing Aristocrat to “accelerate alternative plans”.
Playtech first warned that the takeover was in doubt last month. If the deal does collapse, the Playtech board said it will evaluate other proposals received in recent months. Options include a deal to take it into the fast-growing US betting market.
Aristocrat said “a number of material investors who have not engaged meaningfully” were “effectively blocking” the deal. CEO Trevor Croker said he was “disappointed” and called the situation “highly unusual and largely beyond Aristocrat’s control.”
Playtech shares surged more than 70% after Aristocrat first made its 680p-a-share offer last October. Playtech attracted the interest of other potential bidders and speculators took positions in its shares hoping for a bidding war. That ultimately failed to materialise, with prospective bidders including Eddie Jordan walking away without making a firm offer.
Playtech shares traded well above the 680p bid level for much of the last few months, reaching a high of 770p in November. Traders who bought in at these levels would now be facing a loss if the Aristocrat deal went through. This could explain opposition to the deal.
The stock opened at 586p today, up 1.65% or 9.5p.
Playtech CEO Mor Weizer said he “remains confident in our long-term growth prospects”. The company said recent trading was ahead of expectations and alternative plans were “well advanced”.
Chairman Brian Mattingley said: “This process has shone a spotlight on the fundamental premium value of Playtech’s businesses. In the event that the Aristocrat Offer does not proceed, the Board is determined to pursue options to maximise value for all shareholders and accelerate validation of that value.”
Peel Hunt today upgraded Playtech to a “buy” and set a price target of 700p.
