Playtech anticipates its $3.7bn sale to Australian-listed gaming manufacturer Aristocrat will collapse at a delayed shareholder meeting which is scheduled to be held later today.
The company is hosting its court and general meeting, which was initially slated for January 5, 2022, in connection with the recommended cash acquisition. It added that “details of the voting results will be announced as soon as they are available”.
Yet, Playtech states that “based on the proxy votes received to date, however, the minimum threshold (75% of those shares voted) needed to approve the scheme and related resolutions will not be achieved”.
If this is the conclusion following the final vote count, the purchase, which it had been suggested could close during Q2 2022, will not proceed, the scheme will lapse and the offer period for the company will end.
This follows prior concerns that were first declared in a Sky News report, that the transaction could be blocked by a collection of Asia-based backers, with it speculated that these investors, which are mooted to own approximately 25% of the company, could vote in concert to prevent a sale.
However, the group’s board adds that it has been “actively considering its options for maximizing shareholder value in a scenario where the Aristocrat offer does not proceed and lapses”.
This has led to an evaluation of M&A proposals in respect of a potential break-up of the company’s B2C and B2B businesses, which would also be subject to shareholder approval, as well as regulatory and other clearances.
“Shareholders are advised that no definitive agreements have been reached and negotiations are ongoing, and there can be no certainty that any definitive agreement will be reached,” it adds.
Brian Mattingley, Chair of Playtech, commented “This process has shone a spotlight on the fundamental premium value of Playtech’s businesses. Playtech is the leading technology company in the gambling industry, with an unrivaled quality and breadth of products.
“Snai is the number one sports brand across retail and online betting in the Italian market. In the event that the Aristocrat offer does not proceed, the board is determined to pursue options to maximize value for all shareholders and accelerate validation of that value.”
Furthermore, Playtech, which expects to close the sale of its Finalto financial services division during Q2, asserts that trading, since its last update on November 12, 2021, has “continued to see a strong trading performance” across its core business.
B2B has witnessed growth across the Americas as well as in Europe, with online strength and recovery in the Snaitech retail division driving B2C. As a result, adjusted EBITDA for the year is expected to exceed management expectations
Mor Weizer, CEO of Playtech, noted: “Playtech remains in a strong position and continues to perform very well across its core B2B and B2C businesses.
“This progress reflects the quality of our technology and products and the hard work and commitment of our talented team.
“We remain confident in our long-term growth prospects and, in particular, our ability to benefit from the structured agreements (including Caliente) that are already allowing Playtech to access newly opened gaming markets.”
Responding to this latest potential development, Aristocrat has expressed disappointment at the expected lapse of the transaction, with the group stating that “developments since the announcement of our offer have been highly unusual and largely beyond Aristocrat’s control.”
Trevor Croker, Aristocrat CEO and Managing Director, commented: “In particular, the emergence of a certain group of shareholders who built a blocking stake while refusing to engage with either ourselves or Playtech materially impacted the prospects for the success of our offer, which had been recommended by the board of Playtech.
“The long term interests of our shareholders are the absolute focus of M&A at Aristocrat. We will always take a highly disciplined, strategic approach to our investment choices, consistent with our customer-centric philosophy.
“Aristocrat has entered into 2022 with excellent operational momentum, flexibility, and resilience with continued strong product-led performance across gaming and Pixel United.
“We look forward to providing further detail to shareholders at our upcoming AGM later this month. From a strategic perspective, Aristocrat’s commitment to participate in the online RMG segment will not change.
“In the future, online RMG capability will be one way we deliver new and connected experiences that leverage our world-leading content and unlock additional value across Aristocrat’s portfolio while deepening customer engagement.
“Our focus now shifts to accelerating our plans for alternative online RMG scaling options, and continuing to execute our growth strategy, in a way that is consistent with our rigorous investment criteria, high regulatory standards, and integrity. We look forward to sharing more details with shareholders as we move forward.”