Playtech postpones shareholder vote on Finalto/Markets.com sale
Now it gets really interesting.
Playtech plc (LON:PTEC) has just announced that it has postponed the shareholder vote set for next Thursday, July 15 to approve the $101 million sale of its financials division Finalto (which includes the Retail FX brokerage Markets.com) to an investor group led by Israeli businessman Zvika Barinboim. The postponement comes after a competing, premium all-cash offer emerged late in the process from Hong Kong investor Jonathan Bond’s TT Bond Partners (via investment vehicle Gopher Investments).
As we reported here earlier this week, TT Bond Partners and the Barinboim group have engaged in a press release war over Finalto, each pressing both the Playtech board and shareholders that their offer is the better one.
And now, Playtech said that it has consulted with a “large proportion of its major shareholders”, leading it to decide to adjourn the July 15 shareholder vote to allow both the Board and shareholders to “further consider recent developments”. Playtech did state that the postponement is not indefinite, with a two week adjournment planned such that an adjourned general meeting to consider the Barinboim offer is now planned for July 29. However Playtech added that “further announcements will be made in due course.”
Playtech acknowledged that it has certain obligations to the Barinboim consortium, including an $8.8 million breakup fee (under certain conditions) if it decides to go with another buyer for Finalto, plus an obligation to not engage in negotiations with any third party regarding Finalto. But the postponement means that it will be doing just that, at least within the scope of the agreement, and try to get each party to up its offer and thus extract the most value for Playtech shareholders.
What this also means, is that it is highly unlikely that the original deal with the Barinboim group will happen at the original agreed-upon price of $210 million (which as we have written earlier is really $101 million, as Playtech will be kicking back $109 million of cash into the acquired assets).
As we wrote above, this should be getting more interesting in the coming weeks.
The full text of the Playtech announcement today follows:
Update on Finalto sale process and General Meeting
9 July 2021
Playtech plc (“Playtech” or the “Company”) announced on 26 May 2021 that it had successfully entered into a binding agreement (the “SPA”) for the sale of its financial trading division (“Finalto”) to a consortium buyer (the “Consortium”) for cash proceeds of up to US$210 million (the “Consortium Offer”). Completion of the Consortium Offer is conditional on the approval of the disposal by shareholders at the general meeting (the “General Meeting”) and the approval of certain regulatory authorities in respect of the change of control. The associated circular to shareholders with respect to the Consortium Offer was published on 24 June 2021.
Since the initial announcement by Gopher Investments (“Gopher”) on 2 July 2021 of its indicative non-binding conditional offer to acquire Finalto for US$250 million, Playtech has consulted with a large proportion of its major shareholders. As a result of these discussions the Company intends to adjourn the General Meeting which has been convened for 15 July 2021 to allow both the Board and shareholders to further consider recent developments. It is currently intended that there will be a two week adjournment such that the Company will hold an adjourned general meeting to consider the Consortium Offer at 10 a.m. on 29 July 2021. Further announcements will be made in due course.
As announced previously, both Playtech and the Consortium are bound by the restrictions agreed as part of the SPA, which includes not engaging in negotiations with any third party regarding a potential transaction involving the sale of Finalto, as is customary for transactions of this nature. For the avoidance of doubt, the adjournment of the General Meeting does not change these restrictions.
The indicative proposal from Gopher is non-binding and is subject to a number of conditions, therefore there can be no certainty that the transaction proposed by Gopher would proceed to signing or completion. As stated above, the Consortium Offer has been signed and is binding, but remains subject to shareholder and regulatory approval, and as such there can be no certainty that the Consortium Offer will proceed to completion.