Playtech Shareholders Vote Against $2.84bn Takeover By Aristocrat

Summary

• Aristocrat $2.84B acquisition offer rejected
• Hong Kong investment firm submits bid for Playtech
• Aristocrat will not change strategy despite Playtech rejection

Gaming analysts were pretty confident that Australian based operator Aristocrat Leisure would get the approval it required to complete a successful acquisition of British developer Playtech. Aristocrat had made a $2.84 billion offer to acquire Playtech and it appeared that Playtech shareholders were in favour of the acquisition.

One big reason market analysts were confident of a potential Aristocrat acquisition was because Aristocrat was the only operator in the running for a potential acquisition. Playtech had earlier received a bid from Hong Kong investment firm TT Bond Partners who advised Playtech of a bid from Gopher Investments but it was turned down.

When it came down to a vote, the majority of Playtech shareholders decided to vote against the Aristocrat acquisition on Feb 02. Aristocrat needed a minimum of 75 percent of Playtech shareholders to vote in favour for it to be able to acquire the UK based company. However, less than 55 percent of shareholders voted in favour of the acquisition and as a result the offer was rejected.

Aristocrat will now have to wait a minimum of 6 months before they are eligible to make another counter offer for Playtech should they desire to do so. We will also have to wait and see if Playtech is still open to an acquisition after 6 months or whether the UK developer gets acquired in the next few months.

There are unconfirmed reports which suggest that Playtech has received another offer from TT Bond Partners but neither Playtech nor TT Bond Partners have confirmed the same. Playtech has however confirmed that it is looking at new approaches but did not confirm anything further.

When news broke that Playtech shareholders had rejected the acquisition offer from Aristocrat, Playtech shares rose by 5 percent.

Aristocrat Will Not Change Market Strategy

One of the main reasons why Aristocrat was in favour of acquiring Playtech was because the company had decided to get into the random number generation (RNG) sector. Trevor Croker, MD and CEO for Aristocrat said that even though the Playtech acquisition deal fell through, it would not change Aristocrat’s plans of entering the RNG sector and providing the best value possible to its stakeholders