Gopher Calls En Garde to Aristocrat’s Deal with Playtech

Playtech confirmed that the media rumours about a potential bidding war are true. One of the prominent shareholders in Playtech requested due diligence information a few days after the announcement that Aristocrat Gaming will acquire the developer.

According to reports, Gopher International made a preliminary approach to explore an offer for all of Playtech’s issued and to-be issued share capital.

The Hong Kong-based investment vehicle, Gopher, gained Playtech’s financial unit, Finalto, in a bid war against Barinboim Group during September this year. Gopher is a consortium of Asian and American investors and they own 5% in Playtech shares.

 Was a Second Suiter Inevitable?

Sky News released the news over the past weekend that Gopher Investments are moving in for a possible counter-bid in the Aristocrat-Playtech negotiations. Playtech has since confirmed that Gopher reached out to them on 21 October, three days after the formal recommendation of Aristocrats offer.

The Australian company finally presented a reasonable deal according to Playtech’s board, after many rebuffs from the London-based developer. Aristocrat tabled an offer of £2,7 billion, which equates to £6.80 per share and Playtech’s board announced their recommendation to the shareholders on 17 October. At the time, it was a 58% premium on the company’s closing price in that previous week.

This past Friday the company’s closing shares listed at £7.08 and following the reports of a bidding war, Playtech’s shares closed at £7.25 on Monday. According to the reports, Gopher’s offer would be worth approximately £3 billion. This would not be the first tug-of-war for Playtech, as Gopher gained their financial unit in a highly debated bid-war with Israeli Barinboim Group.

Playtech was in talks with Barinboim, regarding the sale of Finalto, since January and came to an agreement with them in May for a deal worth $210 million. Gopher suddenly emerged in July with a $250 million offer. Following a delayed GM, and several unanswered questions from Gopher, the company supported Barinboim’s bid. Shareholders later rejected the offer with a majority vote and Gopher moved in to clinch the deal.

 To Be or Not to Be?

Aristocrat’s offer still needs to be accepted by at least 70% of Playtech’s shareholders, but in their announcement on 17 October, the software provider’s board showed they intend to vote unanimously in favour of the deal. This was all before Gopher popped up with talks of a takeover.

Aristocrat seems confident and believes that their offer will move forward. The Australian game and slot machine maker said:

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

In their response to the Gopher approach, the company urged Playtech shareholders to vote in favour of the board recommended acquisition. It is not clear when the shareholder meeting will take place, but Playtech continues their discussions with Aristocrat.

Playtech said that the discussions with Gopher are still at a very early stage and they do not have any confirmation that Gopher will proceed with a firm offer. An announcement regarding the timing of Aristocrat’s offer will be made in due course.