Saying that Playtech’s 9 million bid for troubled Israeli trading platform Plus500 is opportunistic and too low, Odey Asset Management, the largest shareholder in Plus500, said it will vote against the acquisition.
Playtech’s offer of 400 pence a share, or $709 million, is an “opportunistic bid exploiting current regulatory issues and risks,” the London hedge fund said in a press statement. The bid represents “too great a discount,” Odey said and advised Plus500 to seek more offers.
The U.K. Financial Conduct Authority ordered Plus500 to freeze some customer accounts last month as part of a review of its anti-money-laundering controls.
As the trading platform’s shares plunged and other hedge funds began shorting the company, Odey raised its stake to about 25 percent, reports Bloomberg News.
Plus500 CEO Gal Haber said last month that the FCA found “major failings” in how the company collected documentation on its clients’ proof of residence and financial position. The company’s stock has lost about 38 percent of its value this year, according to Bloomberg.
Playtech’s bid can be cancelled if Plus500’s business continues to falter,
Odey said in the statement that the “financial and strategic value” of the company to an “industry bidder is significantly higher.”
“We welcome Plus500 management’s approach to Playtech’s proposed cash acquisition, which allows other potential bidders the opportunity to appraise Plus500 with the same information as Playtech, and which allows management to cease its commitment to Playtech’s proposed cash acquisition should another bidder present a higher offer,” it said.
