Gambling software group Playtech is in takeover talks with its second-largest shareholder and is embarking on a bidding war with Australian slot machine developer Aristocrat Leisure, which has already submitted a £ 2.7 billion bid.
Gopher Investments, a Hong Kong-based asset manager, contacted Playtech’s board on October 21 to seek “certain prudential investigation information”, the UK-listed gambling company said in a statement on Monday.
Playtech, founded in 1999 by Israeli billionaire Teddy Sagi and listed in 2006, develops software for online gambling and gambling machines and has operations in three US states. It is in talks with U.S. partners to start in Mississippi, after receiving a license to work in the state last month.
Analysts estimate that the U.S. betting market is likely to become the world’s largest regulated gambling market after a federal ban on betting outside Nevada was overturned in 2018.
Shares in Playtech rose 4 percent to 734p a share in London early this morning before falling. However, they are still trading ahead of Aristocrat’s offer of 680p per share.
Aristocrat said in a statement on Monday that its “long-term engagement with regulators across key gaming jurisdictions, coupled with strong financial fundamentals, deep customer relationships and established presence in global gambling markets” means it is ready to complete the deal in the second. quarter of next year.
He added that his offer would “provide certain value to Playtech shareholders”.
Playtech has had a tumultuous relationship with Gopher, who owns 4.9 per cent of the London-based gambling company, since buying the company for about $ 100 million in May.
The asset manager was outspoken in his criticism of the Playtech board during the sale of its financial trading division, Finalto, and accused him of not being transparent in the sale process. Gopher eventually stepped in to buy the business himself in a $ 250 million deal that is currently being finalized.
Aristocrat said its acquisition of Playtech provided the Finalto sale was completed.
Gopher also expressed concern that Playtech’s long-awaited new chairman, Brian Mattingley, was previously chairman of the football betting startup Football Index, which collapsed in March in administration.
Mattingley has been appointed chairman after years of perceived corporate governance failures at Playtech, including multiple shareholders revolt more than the size of the pay package given to its CEO, Mor Weizer.
The company has been the subject of several campaigns by activist investors, including Jason Ader, a series double-investor, and Odey Asset Management, the investment vehicle of hedge fund manager Crispin Odey, and trades at a much lower value than many of its companies. peers in the industry.
Sagi ran the business in 2006 and sold its last shares in 2018.
Playtech shareholders, who account for about a fifth of the company’s public shares, said they intended to vote in favor of the Aristocrat takeover when the offer was announced.
Playtech said talks with Gopher were “at an early stage and ongoing”. Gopher declined to comment.