Playtech is Courting Numerous Potential Buyers in Asia & Beyond
Casino software giant Playtech is looking for a buyer, and there are a number of interested buyers including F1’s Eddie Jordan, and Asian billionaires. The software maker has been driving innovation in the casino tech sector for over two decades and has built up an impressive client list that includes several of the industry’s biggest hitters, like Entain and bet365. Asian investors are circling and an offer to good to be refused is expected to arrive at the desk of the company’s CEO Mor Weizer.
The largest gambling technology developer in the world with its who’s who client list, Playtech, is courting offers from a broad spectrum of investors from Europe, North America and Asia. ©stevepb/Pixabay
It was only a couple of months ago that Aristocrat made a $3.7 billion offer for Playtech, the deal between these two parties never reached a formal conclusion, and consequentially other investors have been circling with increasing interest.
An unusual person who has been preparing an offer for the casino technology provider is former Formula One team principal Eddie Jordan. Jordan’s SPAC, JKO Play had been set to propose an offer valuing the firm at $750 per share. Following pressure from several key parties across the industry, it has now been confirmed that Jordan’s offer will not be made.
The pending bid from Aristocrat does appear to have been a fundamental reason as to why this offer was not ultimately submitted. But with that, there are a few additional Asian investors circling the bidding pool and looking to find a route to drive a reduction in the Playtech share price before submitting an offer for purchase. With Aristocrat’s offer now recommended to the shareholders and board of Playtech, they remain in a commanding position to be the eventual beneficiary of the deal.
Whilst the deal does seem to be heading firmly into Aristocrat’s court, the UK Takeover Panel this week did extend the limit on JKO to improve their offer. This revision was made following the public statement of JKO to be the eventual owner of Playtech, which is clearly a move that the UK government is supporting and willing to make regulatory concessions for.
Asian Investors Have Potential to Block Takeover Bids
A network of Asian investor groups based primarily out of Hong Kong have been building their collective stake in Playtech since early October, and as of early 2022, they own approximately 27 percent of the company. With such a dominant position in terms of the equity stake, the network of Asian investors has considerable voting power when it comes to key board decisions. Operating under the assumption that they will continue to work alongside their compatriots, it doesn’t spell good news for Western investors interested in launching a Playtech takeover.
With this extra dimension in play, the economics of a potential takeover bid becomes particularly difficult for investors outside of Asia. It is difficult to predict how Playtech will engage with the various offers that are coming in. The forthcoming shareholder meetings are due to take place at the beginning of February, and that will be when the software provider will have to provide clarity on how it will deal with the incoming bids being levied.
The financial engineering ongoing within Playtech and the swathe of takeover bids being made for the firm are the latest in a frantic period of consolidation and reshuffling of priorities across the global gambling sector. Tighter regulations, the emerging new markets to launch gambling ventures, and an increasing reliance on capital allocation has caused the whole sector to experience this highly active merger and acquisitions period.
As it stands Aristocrat occupies a commanding position in the takeover fight, and they will go up against the block of Asian investors that may leverage the network of their total equity to disrupt the takeover bid. All will come to a head on February 2 at the next shareholder meeting, and following this, more clarity on the future direction of Playtech will become apparent.
