-
Casinos for you
Playtech M&A Chatter Continues while TTB Faces Deadline
By Shane Addinall May 25, 2022 IndustryThe UK-based igaming developer refused TTB’s request to waive restrictions, and although the Hong Kong investment company waited 6 months for the day to arrive, they are yet to table an offer.After approaching the UK-based software provider in February, TTB still has not made a takeover bid for Playtech. Now the Hong Kong investment company has less than a month to make a move. According to the City Code of Mergers and Acquisitions, TTB has until 17 June before the company loses its spot in the Playtech takeover race.
Following the collapse of the Aristocrat Leisure bid and the withdrawal of other suitors, Playtech remains open to offers, and currently, TTB is the only one in line. However, the company hasn’t clarified its intent after requesting that Playtech waive the restriction brought on by Gopher Investment’s withdrawal.
Statements from Playtech indicate a continuous discussion between the companies but no definitive mention of an offer, although they did not consent to an earlier release of the restrictions.
28 Days Notice
In November 2021, TTB advised a potential Playtech suitor, Gopher Investments. Although Gopher withdrew from the bid, TTB faced restrictions under rule 2.8 of the City Code of Mergers and Acquisitions. TTB’s affiliation with Gopher, a Playtech shareholder, prohibits the company from making another offer for six months after their withdrawal.
Gopher and other bidders that withdrew left Aussie slot manufacturer, Aristocrat as the sole suitor. Aristocrat lost the bid because Playtech shareholders voted against the transaction, and reports say this was because they believed the offer undervalued the company. Previous Playtech CEO, Tom Hall, disagreed with the Australian company’s plans to review operations in Asia and potentially sell the Italian retail arm, Snaitech.
On 13 May, Playtech publicly announced the deadline for TTB to put an offer on the table as the restricted period ended on 20 May. The software provider confirmed that talks with the Hong Kong investment firm were ongoing, but there is no offer yet.
TTB Under Pressure
An unnamed investor group approached TTB with interest in acquiring Playtech. This spurred the request from TTB in February to have the restriction lifted. This group includes the previous Playtech CEO, Tom Hall. Following the expiry of the restriction period, TTB must formally signal Playtech of its intent by the 28th day.
While the countdown ticks down, TTB continues to drag its heels and has not commented on the peculiar situation. If the 28 days lapse, only the Panel on Takeovers and Mergers can extend the period. The question is, why would TTB not make an offer after requesting Playtech to waiver the restriction? Playtech commented:
“There continues to be no certainty that an offer will be made or the terms on which any offer may be made. The Independent Committee is conscious that TTB has been considering a possible offer for Playtech for 15 weeks.”
Sources cite that TTB originally mentioned an all-cash offer in February. The investment group is the second-largest shareholder in Playtech, with a 4.97% stake. Tom Hall has a 1.34% stake in Playtech. Purportedly, Hall reached out to Playtech’s current CEO, Mor Weizer, and gained his support for a management buy-out of the gambling software giant.
Gripping M&A Narrative
With continued discussions on a viable deal and the backing of Weizer, an offer for the takeover is imminent. Reports mention that the new group of investors presumably would make a better offer than the offer from Aristocrat at 680p per share.
The company’s current CEO stands to lose his position if the deal does not materialise, and Weizer said he understood this risk when deciding to support Hall. When commenting on the possibility of stepping down after 17 years of service, Weizer said:
“I understand the consequences and I understand they are also quite dire if it doesn’t happen but… at least I tried to do what is best for everyone involved.”
Playtech confirmed that the Independent Committee continues to investigate the best options for shareholders. The company enjoyed a successful Q1 and expects a fruitful 2022. Playtech shares increased by 2.72% recently, following a significant share price drop in January.
You might also like