Australia’s Aristocrat Not Letting Rival Bid Stand in the Way of Playtech Acquisition

By | November 8, 2021

Aristocrat said today it will continue to pursue its announced plan to acquire Playtech plc. That’s despite the UK’s online platform provider receiving a rival takeover proposal from one of its largest shareholders.

Aristocrat, G2E, Gaming
Aristocrat gaming machines on display at G2E in Las Vegas. Aristocrat announced that it will continue to pursue its plan to acquire Playtech plc. (Image: WeAreSparks)

Playtech made it clear that it received a request from Gopher Investments, which has a stake of 4.97% in the company. The request was to see certain due diligence information. There is speculation that Gopher will submit an offer to counter that of Aristocrat.

According to reports, Gopher’s offer could exceed the reported US$2.9billion offered by Aristocrat back in October. However, the Australia-based slot machine supplier isn’t too concerned.

Aristocrat Set on Playtech Acquisition

Aristocrat stated that it was aware of Gopher’s interest, but asserted that it would continue working with Playtech to advance the recommended acquisition. It urges Playtech shareholders to vote in favor of Aristocrat’s recommendation at the shareholder meetings once it has published its Scheme Document.

Aristocrat’s long-term engagement with regulators across key gaming jurisdictions, together with strong financial fundamentals, deep customer relationships and established presence in global gaming markets, positions Aristocrat to complete the transaction as planned in the second quarter of calendar year 2022,” asserted Aristocrat.

Aristocrat stated that Playtech is valued at $2.9 billion on a fully-diluted basis, and $3.7 billion on an enterprise basis.

The Australian gaming giant has raised $673 million to finance its acquisition plan via an institutional entitlement sale. It is currently working on a retail entitlement offering that will raise an additional $304 million.

Gopher Ready to Take on Rival

Gopher, a Hong Kong-based firm, began showing interest on October 21, just a few days after Aristocrat’s proposed acquisition was announced, according to Sky News. It only sought initial information that could be used to formulate a possible offer; however, nothing definitive has emerged.

The media outlet added that Gopher’s bid could hover around $4.05 billion once it put all the pieces together. Aristocrat’s offer would automatically be rejected should any offer arrive that is at least 10% higher than what the Australian company has presented. Gopher’s interest in Playtech comes via funding made through an affiliate, TT Bond Partners.

Gopher made a deal with Playtech to purchase Finalto’s financial trading business. This came after months-long negotiations with Finalto and a consortium of Israeli companies, led by Barinboim Group. This arrangement, which has a cash enterprise value of $250 million, should be signed in the first six months of 2022.

“There is no certainty that Gopher’s approach will result in an offer for Playtech, nor as to the terms on which any offer may be made,” Playtech said of Gopher’s interest.

Regulators will now determine the deadline by which the Hong Kong-based investment firm must either announce its intent to bid or walk off. It is not yet clear how Gopher might structure an offer to purchase all of Playtech. This is despite the Finalto transaction having ended.

Markets React to New Potential Offer

The interest from Gopher has already proven beneficial to Playtech. On Friday afternoon, its stock closed at $9.59, $0.38 higher than what Aristocrat had used to calculate its offer. After the announcement was made, though, it added another $0.17 as it increased to $9.82. The stock increased to $9.94, its new 52-week high, and, as of this writing, is $982.69.

Gopher was expected to provide an update on its stance today, but no new details have been made available.

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