UUÂãÁÄÖ±²¥

On 7 November 2021, Playtech plc’s (Playtech) board  that it had received a preliminary approach from its second-largest shareholder, Hong Kong-based asset manager Gopher Investments (Gopher), in relation to a possible offer to acquire the FTSE 100 company’s issued and to be issued share capital. This approach follows an earlier offer for Playtech by Aristocrat (UK) Holdings Ltd (Bidco), a wholly-owned subsidiary of the Australian slot machine manufacturer Aristocrat Leisure Ltd (Aristocrat).

The potential tie-up with Aristocrat was officially announced on 17 October 2021, valuing the company at £2.1bn, with the offer of 680 pence in cash for each of Playtech’s shares representing a premium of 58.4% to the closing price of 429.2 pence per Playtech share on 15 October 2021. News of the offer, combined with a unanimous recommendation from the board, saw a corresponding  in the gambling software development company’s share price of approximately 58%.

Although it is yet to be seen if Gopher, which holds a 4.9% stake in Playtech, is to make a formal offer, media speculation surrounding a possible second offer for the company led its board to reveal Gopher’s preliminary approach, which sought access to due diligence information ‘in order to explore terms on which a possible offer for all of the issued and to be issued share capital of Playtech might be made’. In its statement, Playtech’s board confirmed that the initial approach was made on 21 October.

The relationship between Playtech and its second-largest shareholder has not been a smooth one. In a July 2021 , Gopher responded to a statement by Playtech’s Board on Gopher’s US$ 250m offer for Playtech’s financial trading division, Finalto, in order to ‘clarify certain statements made in the Playtech board’s announcement’ and to urge a delay to Playtech’s AGM. The press release also urged Playtech’s shareholders to vote against an earlier offer for Finalto by a consortium led by Israel-based Barinboim Group by Playtech’s shareholders if the AGM was to proceed on the initial date of 15 July 2021.

In August 2021, Gopher welcomed the voting down of the selling of Finalto to the consortium by Playtech’s shareholders at the company’s delayed AGM. Following the vote, Playtech’s board, which had continued to support the consortium’s bid despite the competing offer by Gopher, finally agreed to sell Finalto to its second-largest shareholder for US$ 250m in September 2021.

In a  released on 8 November 2021, Aristocrat acknowledged Gopher’s preliminary approach, and was keen to emphasise its ‘long-term engagement with regulators across key gaming jurisdictions, together with strong financial fundamentals, deep customer relationships and established presence in global gaming markets’. According to Aristocrat, this will allow it ‘to complete the transaction as planned in the second quarter of calendar year 2022’.

Gambling companies have attracted increased attention from foreign bidders, which may be attributable in part to the relaxation of gambling regulations in the US. On 21 September 2021, FTSE 100 sports betting and gambling company, Entain plc (Entain) confirmed that it had received two approaches from US sports betting operator, DraftKings Inc (Draftkings). This followed an earlier offer by US hospitality and entertainment company MGM Resorts International (MGM) in January 2021, which Entain rejected. This earlier decision paid off for Entain, with Draftkings’ offer of £16.4bn being approximately twice that of MGM’s. For more on this story, see our Market Tracker  and our blog post: 

Similarly, on 30 September 2020, former FTSE 250 online gambling company, William Hill, and US casino company, Caesars Entertainment plc, came to an agreement on the terms of a recommended cash offer for the entire issued share capital of William Hill. This followed an earlier offer from US asset manager, Apollo Management International LLP, which had approached William Hill in August 2020. For more on this story, see our Market Tracker  and our blog post: 

As the offer from Aristocrat has been structured as a scheme of arrangement, the Panel will announce the PUSU deadline, by which Gopher will need to confirm its intentions, in accordance with paragraph 4(c) of Appendix 7 to the . The Panel normally require the second offeror to clarify its intentions by no later than 5pm on the seventh day before the date of the first offeror's shareholder meetings. In its recent statement, Aristocrat confirmed that Playtech intends to publish the scheme document shortly, with notices convening the relevant shareholder meetings to approve the recommended acquisition.

Market Tracker will continue to monitor as it develops.