Aristocrat cleared to acquire Playtech as JKO Play pulls out of making a bid. Playtech’s shareholder vote will take place on February 2. (Image by JUNK at unsplash.com)
In the latest twist of what has been quite the saga, JKO Play has officially pulled out of the running to acquire Playtech. The company led by former Formula 1 boss Eddie Jordan and the former Scientific Games executive Keith O’Loughlin, has now left the road clear for Australian-based Aristocrat to purchase Playtech for £2.7bn.
Aristocrat was the first to make a bid to acquire Playtech after it became clear the iGaming firm had expressed it was open to acquisition in order to continue its growth. However, shortly after, Gopher Investments, a Hong Kong investment firm, quickly made a counteroffer. That stayed in place for two weeks until it became apparent that JKO Play was considering a counter-bid. Gopher Investments pulled out of the race just days after the intentions of JKO Play were made clear.
Playtech set a date for a shareholder vote on the proposed Aristocrat takeover for January 12, however amid the news that JKO Play and potentially other firms were showing interest, the firm delayed that vote. This is now set to take place on February 2. By pulling out, under UK Takeover Panel rules, JKO Play now cannot make another offer for the next six months.
Why JKO Play Pulled Out of Playtech Race?
According to the Financial Times, it is believed that JKO Play decided against making a reported £3bn bid to acquire the iGaming giant, as they were concerned that a group of Asian investors were planning to block the deal. While there has been no official statement from JKO Play regarding the reasoning behind not going ahead with a bid, the Financial Times claims that three people involved in the process have confirmed this as the main reason.
A group of Asian investors have been purchasing Playtech shares at prices above the market value and between them now own around 27% of the company. As mentioned in our article at the time, a concert would need over 25% of the company’s shares to veto any proposed takeover. Plus, should the concert gain over 30% of the shares, it would have the power to make a mandatory offer.
Playtech Share Price Drops After JKO Play Pulls Out
As news of JKO Play pulling out of proposing a bid for Playtech spread, the Playtech share price quickly dropped throughout late Thursday and throughout the day on Friday. They were priced at 730.50GBX at 16:30 GMT on Thursday but had dropped (14.4%) to 624.70GBX by 08:30 on Friday morning. By 13:00GBX, that share price had fallen a further 11.6% to 552.00GBX. That price has since recovered to 631.08GBX meaning it is down 13.60% since the news first broke.