Former Formula 1 team leader Eddie Jordan has been given a little breathing room. His attempt to purchase gaming company Playtech through JKO Play Ltd. will be allowed more time to submit a bid.
Playtech expected JKO, the company created by Jordan, to have a bid turned in by today. Jordan may be fast on the track, but he apparently isn’t in the boardroom. Playtech has agreed to keep the bid window open until January 26.
UK rules are pretty clear on the subject of mergers. Rule 2.7 of the City Code on Takeovers and Mergers indicates that once a firm announces its intention to make an acquisition offer, it has to submit the offer within 28 days.
The new date was approved after JKO asked for more time to plan its next steps. Aristocrat has its eyes on Playtech as well, with its $2.9-billion offer already being discussed.
Playtech shareholders were to discuss Aristocrat’s offer today. However, that meeting was postponed until February 2. As a result, JKO asked for more time, with its new deadline being seven days prior to that rescheduled meeting.
If another company appears between now and then with a firm offer, JKO’s option could be taken off the table.
Aristocrat Still Not Concerned
Aristocrat was the first to show interest in the gaming company. It didn’t waste time in preparing its bid, and while the ink was still drying, JKO appeared. It hinted at having a possible interest in competing, with the company specifically formed for that purpose.
However, it still hasn’t put a bid in. This has allowed Aristocrat to be more confident in its position. When Playtech directors showed support for the Australian gaming company’s offer, that confidence grew.
Playtech is going through the motions as required by law, but may already have its mind made up. In announcing the extension for JKO, it added, “Despite any adjournment of the Court Meeting and General Meeting, there remains no certainty that JKO’s approach will result in an offer for the Company, nor as to the terms on which any offer might be made.
“The Playtech Directors continue to recommend unanimously that Playtech Shareholders vote in favor of the Aristocrat Offer at the Court Meeting and in favor of the Playtech Resolutions to be proposed at the General Meeting.”
Aristocrat Sees Big Value in Playtech
Aristocrat is offering a 58% premium on Playtech’s share price at the time the bid was presented. On October 15 of last year, on the London Stock Exchange, the company was trading at £4.285 (US$5.83). It then jumped to £6.774 (US$9.21) a day later.
It is now at £7.283 (US$9.90) as of January 5. JKO will have to do significantly better than Aristocrat if it wants to stay in the race.
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