Playtech expects rejection of Aristocrat 680p-per-share offer at today’s shareholder vote
As we reported yesterday was likely to happen (based on how the company’s shares were trading), online gaming tech and financial services company Playtech put out a brief statement this morning that it expects today’s scheduled Playtech shareholder vote to either accept or reject Aristocrat’s 680p-per-share all-cash offer to end in a rejection of the deal. And, subsequently, in the lapse of Aristocrat’s offer.
The statement also confirmed our earlier report that the company has been working on a “Plan B” to break up Playtech, i.e. looking to separately sell the group’s B2C and B2B divisions.
Playtech also provided a brief update on the $250 million sale of its financials division Finalto (and Markets.com) – which has already been approved by Playtech shareholder – saying that it expects to complete the sale of Finalto in Q2-2022, following receipt of final regulatory clearances.
It will be interesting to see what happens to Playtech plc (LON:PTEC) shares once trading opens later this morning. PTEC has dropped from a high of 775p in November when shareholders were anticipating a possible bidding war to break out, to yesterday’s close of 577p, well below Aristocrat’s 680p offer. Before the Aristocrat deal was first announced in mid October, Playtech shares were at about 430p.
The full text of today’s Playtech statement reads as follows:
Playtech plc
Anticipated Results of Shareholder Meetings
Board Evaluating Alternative Proposals Received
FY21 Results Anticipated to Exceed Previous Expectations
The Board of Playtech (the “Board”) announces the anticipated result of today’s Shareholder Meetings, and also announces that it is evaluating proposals it has received in respect of the Company’s businesses. The Board is also pleased to update on current trading.
Anticipated Results of Shareholder Meetings
Later today, Playtech will hold the Court Meeting and General Meeting convened in connection with the recommended cash acquisition of Playtech by Aristocrat (UK) Holdings Limited (“Aristocrat”) (the “Aristocrat Offer”). The final results of the meetings will not be known until after those meetings have been held. Based on the proxy votes received to date, however, the minimum threshold (75% of those shares voted) needed to approve the Scheme and related resolutions will not be achieved. If this remains the case on the final vote count, the acquisition of Playtech by Aristocrat will not proceed, the Scheme will lapse and the offer period for the Company will end.
Details of the voting results will be announced as soon as they are available in final form after the Shareholder Meetings have been held.
Board in Receipt of and Evaluating Alternative Proposals
Playtech is undergoing a significant transition, and the Board remains very confident about the positive long term prospects for the Group. This is also evidenced in the recent trading performance across both its core B2B and B2C businesses as further detailed below.
The Board has been actively considering its options for maximising shareholder value in a scenario where the Aristocrat Offer does not proceed and lapses, and in so doing has been evaluating attractive M&A proposals it has received from third parties in respect of Playtech’s B2B and B2C businesses. Any proposal or proposals, if agreed, are expected to be subject to shareholder approval, as well as regulatory and other clearances. These alternative proposals are not offers subject to the City Code on Takeovers and Mergers (the “Code”).
Shareholders are advised that no definitive agreements have been reached and negotiations are on-going and there can be no certainty that any definitive agreement will be reached.
Further announcements will be made as and when appropriate.
Mor Weizer, CEO of Playtech said,
“Playtech remains in a strong position and continues to perform very well across its core B2B and B2C businesses. This progress reflects the quality of our technology and products and the hard work and commitment of our talented team. We remain confident in our long-term growth prospects and, in particular, our ability to benefit from the structured agreements (including Caliente) that are already allowing Playtech to access newly opened gaming markets.”
Brian Mattingley, Chairman of Playtech said,
“This process has shone a spotlight on the fundamental premium value of Playtech’s businesses. Playtech is the leading technology company in the gambling industry, with an unrivalled quality and breadth of products. Snai is the number one sports brand across retail and online betting in the Italian market. 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.”
Current Trading Update
Since the Company’s last trading update on 12 November 2021, Playtech has continued to see a strong trading performance across both its core B2B and B2C businesses.
In B2B, the Company had strong growth in the Americas, driven by Caliente, and in Europe. In B2C, Snaitech saw a very strong performance driven by continued online strength and recovery in its retail business. As a result, Group Adjusted EBITDA for the year ended 31 December 2021 is expected to exceed management’s previous expectations.
Our employees are at the heart of our success and have remained cohesive and collaborative despite the continued uncertainty surrounding the Company. The hard work and commitment of our people has contributed significantly to this positive trading performance.
Update on Other Strategic Opportunities
Playtech expects to complete the sale of Finalto in Q2 2022 following receipt of final regulatory clearances.
As previously disclosed, Playtech has continued to pursue an opportunity to allow it to enter selected U.S. states on an accelerated basis in conjunction with Caliente and Caliplay (and others), via a transaction involving a merger of Caliplay into a U.S. listed special purpose acquisition corporation (“SPAC”), alongside the SPAC entering into a long-term commercial agreement with a leading media partner.
Whilst there can be no certainty of outcome, the proposed transaction is progressing and negotiations and financing are both well advanced.