Aristocrat had bid 3.7 billion US dollars (£2.7 billion) in October. Playtech’s board accepted the offer at that time and reaffirmed its support on the news Friday.
On Friday, Playtech stock slipped as much as 16% when FTB Ltd, a company affiliated with Jordon announced that his JKO Play consortium had decided not to make a bid for the online gambling giant.
Reuters reported that no reason was given for the pullout. However, the previous reporting by The Financial Times (FT) and subsequent reporting by other outlets indicate the consortium may have been concerned about Asian investors who have consolidated control of more than a quarter of outstanding shares, fearing that block could scuttle JKO’s bid.
Jordan’s consortium was not the only potential suitor for the FTSE 250 company launched by Tedi Sagi in 1999.
Asian Suitors Declined to Bid in November
Gopher Investments of Hong Kong and Shanghai, the firm’s second-biggest shareholder, walked away from what could have become a contentious 3-way fight to take over the company in mid-November stating that they were content to pursue the purchase of another portion of the business. Gopher did not provide any comment on the news of JKO pulling out.
Aristocrat’s offer is scheduled for a vote by shareholders one week from Wednesday, February 2.
Playtech operatives are expected to confab heavily with a non-committed subset of material investors who have not “to date engaged meaningfully about their views… including certain investors that have disclosed or taken material positions in the company following the announcement of the Aristocrat offer.
“The absence of customary levels of engagement means that the board is approaching the court and general meetings without a clear understanding of whether these shareholders are supportive of the Aristocrat offer.”
Potential JKO Bid Was Marginally Higher
JKO was operating from a very minor position of some 0.51% of the stock but had planned to offer 750p per share as opposed to Aristocrat’s offer of 680p, according to reports. The FT also said that JKO would have spun off Playtech’s Italian business to Entain (ENT.L), owner of bwin, Coral, Ladbrokes, PartyPoker, and Sportingbet. No comment from Entain has been found. The company was known until December 2020 as GVC Holdings.
According to a report in the UK Independent, analysts at Peel Hunt said “an intense focus” was on Playtech’s actual value at this point. “It is clear that there is value to be extracted from Playtech’s interest in Caliente in Mexico and … from the Italian B2C business,” the analysts noted.
Regulatory approvals for the Aristocrat deal are reportedly on track.
Source: Former F1 team boss Jordan drops pursuit of UK’s Playtech, Reuters, January 21, 2022