40 Thursday February 3 2022 | the times
Business
Playtech shares
defy the odds
after another
bidder tails off
Dominic WalshWhen a quoted company loses a third
bidder in two months, the result usually
would be a further fall in share price —
unless, that is, you are Playtech. Its
stock jumped by 6.3 per cent to 613½p at
one point yesterday — albeit later fall-
ing back to close at 585p — despite con-
firmation that investors had blocked a
recommended £2.7 billion bid from
Aristocrat Leisure, of Australia.
Not any old investors, mind you, but
a collective of super-rich Asian tycoons,
from heiresses to football club owners.
Proof, if any were needed, that this was
one of the oddest takeover situations
many in the City could recall.
Given that the shares had long since
tumbled well below the 680p-a-share
put on the table by Aristocrat, the result
of the court and general meetings was
hardly a surprise. Needing a 75 per cent
acceptance level for the scheme to pass,
the bid elicited acceptances speaking
for only 56 per cent of votes cast in the
court meeting and 55 per cent in the
general meeting.
When Playtech recommended
Aristocrat’s third and final offer in mid-
October, it did so not so much because
it was a knockout price but because it
was at a 60 per cent premium to the un-
disturbed price and therefore deemed
worthy of being put to shareholders.
In practice, it was considered a useful
come-on to other suitors and two more
parties duly expressed an interest. One
approach was from Gopher Invest-
ments, a consortium of Asian and
American investors that is in the pro-
cess of buying Playtech’s financial trad-
ing platform for $250 million, although
it quickly fell away.
The other was from JKO Play, an
acquisition vehicle controlled by Eddie
Jordan, the former Formula One motor
racing boss. This was an altogethermore serious proposition than that of
Gopher, being pitched — so rumour
has it — at 750p a share. While there
were question marks over its funding, it
eventually appeared to be ready to
make its move, only to withdraw rather
abruptly.
The problem? In the weeks that fol-
lowed Aristocrat’s recommended offer
of 680p a share — equivalent to £2.1 bil-
lion, or £2.7 billion including debt — the
share register underwent a huge
change, with the wealthy Asians ending
up with about 28 per cent, enough to
persuade JKO that it was pointless to
carry on without their backing.
It was also enough to prevent
Aristocrat from securing the 75 per cent
required under a scheme of arrange-
ment. All of which has prompted some
observers to question why the Take-
over Panel has not declared the Asian
group to be a concert party, given that
they appear to be acting collectively on
the Playtech situation.
It is understood that all dealings with
them go through Tom Hall, a former
Playtech chief executive known as
“Hong Kong Tom”, who has a small
stake. Other investors include Paul
Suen, the owner of Birmingham City
FC, Karen Lo, the heiress, and Stanley
Choi, the professional poker player.
With the Aristocrat deal failing,
Playtech is now expected to consider a
break-up to create shareholder value. It
confirmed that it “has been evaluating
attractive M&A proposals it has re-
ceived from third parties” for both its
technology operations and its Italian
consumer-facing betting business.
Playtech, founded in 1999 by Teddy
Sagi, the Israeli technology and prop-
erty billionaire, supplies gambling
software to many of the world’s biggest
operators. In 2018 it acquired Snaitech,
an Italian betting operation, for
£730 million. Snaitech is understood tohave attracted interest from a number
of betting groups, including Entain, the
FTSE 100 listed owner of Ladbrokes,
Coral and Sportingbet. Ivor Jones, a
gambling analyst at Peel Hunt, the
broker, estimates that a sale of the
Italian business could generate pro-
ceeds of €1 billion.
Playtech’s management, led by
Mor Weizer, 46, the chief executive,
deserve some credit for not letting
these events distract them from their
day jobs. In a trading update, Playtech
said that it had continued to record a
strong performance across the com-pany and that underlying earnings
were expected to exceed the latest
expectations.
Brian Mattingley, 70, chairman of
Playtech, said: “This process has shone
a spotlight on the fundamental
premium value of Playtech’s businesses... The board is determined to pursue
options to maximise value for all
shareholders.”
While Aristocrat could decide to
participate in a break-up of Playtech by
bidding for its business-to-business
technology division, it may feel that it
does not wish to lock horns again with
T
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The ex-Formula One boss Eddie Jordan controls JKO Play, which backed down