Jordan set for pole position in race to take over Playtech

January 6, 2022

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An Australian gambling group bidding for gambling technology company Playtech could lose pole position after a consortium involving the former Formula One tycoon Eddie Jordan was given more time to come up with a £3 billion counterbid.

Playtech revealed yesterday that it was postponing the scheduled court and shareholder meetings, required to rubberstamp the recommended 680p-a-share offer launched in October by Aristocrat Leisure, giving Jordan a chance to trump it.

Playtech said that, having received a preliminary approach from Jordan’s JKO Play group in November, discussions were progressing and JKO had “asked that it be provided with more time to develop the terms of its potential offer for the company”. Playtech said that, although the board continued to recommend Aristocrat’s 680p bid, it was in its shareholders’ interests to see whether JKO could come up with an alternative proposal. It was therefore adjourning next week’s shareholder meetings until February 2.

It said it had also asked the Takeover Panel to set a revised deadline aligned to the new date “by which JKO must clarify its intentions in relation to Playtech”. JKO had originally been given a “put up or shut up” deadline by the panel of close of play today, but now has until close of play on January 26.

Shares of Playtech lost 12.5p, or 1.7 per cent, to 719p, but remain firmly above Aristocrat’s recommended bid amid growing hopes of a counterbid. One analyst said: “The market is giving a clear signal that 680p is not enough, so the Aussies may be forced to sweeten their offer to hang on to the prize.”

Playtech, which was founded in 1999 by Teddy Sagi, the Israeli tech and property billionaire, supplies gambling software to many of the world’s biggest operators. Since its float in 2006, it has grown through acquisition and has about 7,000 employees across 24 countries.

In addition to the preliminary approach from JKO, a group of Asian investors is rumoured to have built a combined holding of more than 20 per cent at prices above Aristocrat’s 680p offer, although their intentions towards Playtech are so far unclear. Playtech and JKO are said to have asked the panel to determine whether the investors are acting as a concert party.

The group, reputed to include the heiress Karen Lo, are not thought to have any connection to the Asian entrepreneurs behind Gopher Investments, which has agreed to acquire Finalto, Playtech’s financial division, for $250 million. Gopher briefly considered expanding its interest to bid for the whole of Playtech.

JKO, which is being advised by Global Leisure Partners and Investec, is backed by Centerbridge Partners and is controlled by Jordan’s family office and Keith O’Loughlin, a former executive at Scientific Games.

Aristocrat, advised by Goldman Sachs, has already secured irrevocable undertakings and letters of intent from shareholders speaking for more than 20 per cent of Playtech’s shares. Its 680p offer is worth £2.1 billion, or about £2.7 billion including debt.

The Australian-listed Aristocrat is a gaming content and technology company and mobile games publisher with more than 6,500 employees across 20 locations worldwide.

In a statement responding to yesterday’s events, Aristocrat said its own proposal remained the “only firm offer” that had been made and provided “attractive value in cash and enhanced regulatory and financial certainty for Playtech shareholders”.

It noted that “other potential bidders have already had a substantial amount of time to make an alternative proposal for Playtech”.

One complexity for Playtech is its 40 per cent stake in Caliente, a Mexican gambling business.

Caliente has been discussing a possible listing via a merger with Tekkorp Digital, a New York-listed special purpose acquisition company. There are suggestions that JKO’s putative cash offer for Playtech could include so-called contingent value rights, based on the value of Playtech’s holding in the joint venture.