Playtech Votes Down Aristocrat Takeover Offer

Shareholders of Playtech PLC torpedoed the offer of Aristocrat Leisure Ltd. to acquire the online gaming giant, falling far short of the required 75 percent shareholder approval. Former bidder and second-largest shareholder TTB Partners may make new bid.

Playtech Votes Down Aristocrat Takeover Offer

The bid of Australian slot supplier Aristocrat Leisure Ltd. to acquire London-based online gaming giant Playtech PLC has been rejected by Playtech shareholders.

At the company’s general meeting, shareholders voting yes on the proposed US$2.9 billion acquisition mustered only 54.68 percent of the total, far below the 75 percent vote threshold required for the deal to go through. “Accordingly, the acquisition of Playtech by (Aristocrat subsidiary) Bidco has been terminated and the scheme has lapsed,” Playtech said in an investor note. “As a result, Playtech is no longer in an offer period as defined by the City Code on Takeovers and Mergers.”

The vote to terminate the acquisition bid was not unexpected. Aristocrat released an ASX statement on the day of the vote anticipating that the rejection, and blaming the outcome on Playtech investors who only bought shares after the takeover was announced in October last year.

“In particular, the emergence of a certain group of shareholders who built a blocking stake while refusing to engage with either ourselves or Playtech materially impacted the prospects for the success of our offer,” Aristocrat CEO Trevor Croker said.

In the week leading to the February 2 vote, J.P. Morgan put the chance of failure at 90 percent after the investors, thought to be from Asia, built up a sizable stake in Playtech at a price higher than Aristocrat’s per-share bid.

Those shareholders, with a combined 27.7 percent stake, are rumored to include AsianLogic founder Tom Hall and International Entertainment Corp Chairman Stanley Choi, among others.

J.P. Morgan remained positive on Playtech stock, citing that “further digital growth and capital management opportunities are available, coupled with strong execution by management, despite a challenging cyclical environment. We believe the risk/rewards remains attractive.”

Playtech shares had previously dipped 4 percent after a report that the company could break up without the acquisition by Aristocrat. Aristocrat’s stock has fallen almost 15 percent this year.

Two weeks ago, JKO Play, the group formed by former Formula 1 team owner Eddie Jordan and former Scientific Games executive Keith O’Loughlin, dropped its plan to submit a rival bid to Aristocrat’s proposal. JKO Play had previously outlined its intention to submit a US$3 billion bid for Playtech, slightly more than the US$2.9 billion takeover offer originally announced by Aristocrat in October.

However, another former suitor may be reviving its takeover bid for Playtech. TTB Partners Ltd., the parent company of Gopher Investments, was one of three original suitors for Playtech. Hong Kong-based Gopher Investments is the No. 2 shareholder of Playtech PLC, holding a 4.97 percent stake. The company dropped out of the bidding contest in mid-November, indicating it was going to pursue a deal to buy Playtech’s financial trading division, Finalto, for $250 million, in a deal expected to close in Q2 2022.

When Gopher/TTB Partners dropped out, Rule 2.8 of London’s City Code on Takeovers and Mergers came into effect, restricting the suitor from making any offers for six months, without Playtech’s consent to lift the restriction. Last week, Playtech PLC officially released TTB Partners from the restriction, clearing the way for a potential new bid.

“Further to the recent media speculation, the Board of Playtech confirms that on the afternoon of 2 February 2022 it was contacted by TTB Partners Ltd. on behalf of an investor group to be formed and advised by it (TTB) requesting that Playtech consent to release TTB from its restrictions under Rule 2.8 of the Code,” Playtech said in a statement.

“This release was requested to allow a possible offer for the company to be considered. The Board confirms that it has given the requested consent to TTB. There can be no certainty as to whether this will result in an offer for the company, nor as to the terms on which any offer might be made. However, any offer, if made, is likely to be in cash.”

As of press time, TTB had not announced its intention with respect to a bid for Playtech.