Aristocrat’s £2.7 Playtech Takeover Rejected by Investors – The saga continues as Playtech considers breaking up the company (Image from Jon Tyson at unsplash.com )
Playtech is considering a break-up proposal after the agreed takeover by an Australian gambling company for a reported £2.7 billion, was rejected by shareholders.
After counting the votes in full, Playtech has reported that the minimum of 75% threshold has not been met. It is no real shock, as many have believed that the share ownership in Asia would thwart any sort of deal. In the past few days, the news was that Playtech investors in Asia, who hold 28%, would all vote against the deal. This means that Aristocrat Leisure would have to rethink its valuation, or, Playtech may consider selling off its assets to conclude a deal.
The takeover saga continues for Playtech, which is now trading at a level far more than the 680p that Aristocrat had offered. This has largely been driven by a group of investors in Hong Kong who are actively buying up shares.
Playtech’s chair, Brian Mattingley, said that the company was far from disappointed with the rejection, as it just proves how valuable the company has become. This is a vast improvement, as in the past, Playtech had struggled for bidders because of the less than attractive nature of company operations, which sells software for gaming to certain gambling groups, and there are other concerns that it is serving unregulated markets. Mattingley also said that Playtech tried and failed to engage with its shareholders in Asia. The investors who had predominantly bought shares for more than 680p didn’t respond to Playtech’s contact attempts.
Who Exactly is Involved in Asia, and What is Aristocrat’s Reaction?
In the Hong Kong group is gaming tycoon, Tang Hao, who also owns shares in Amaya Gaming. There is Stanley Choi, a businessman from China who bought Wigan Athletic in 2020. The football club shortly after went into administration. Also, there is Paul Suen, who is the largest shareholder of Birmingham International Holdings Ltd, the company that owns the majority of Birmingham City FC, a team that is floated on the Hong Kong stock exchange. The pressure has been building on Aristocrat Leisure since November, when their attempted takeover was challenged by the company’s second-largest shareholder, Gopher Investments, a fund based in Hong Kong.
Aristocrat Leisure is understandably unhappy with being rejected by the shareholders, with a spokesperson for the company saying “a number of material investors who have not engaged meaningfully about their views on the recommended acquisition account for the majority of votes cast against”. Aristocrat’s chief executive, Trevor Croker, has said that ever since Aristocrat’s bid in October events had been “highly unusual and largely beyond Aristocrat’s control”.