After seeing off the threat of the Eddie Jordan backed JKO Play, Aristocrat must have thought they were in the driver’s seat in their pursuit of Playtech.
JKO officially pulled out of the race on Friday, with a reason not yet made public. Under UK takeover law, they now can’t make another approach for the casino software specialist for at least six months.
Unsurprisingly, Playtech wants the only possible deal left on the table – the £2.1 billion offer from Australian firm Aristocrat – to go ahead as quickly as possible, with the brand’s board ‘unanimously’ encouraging shareholders to give their approval at a vote scheduled for February 2.
“The board reiterates its recommendation that shareholders vote in favour of the offer from Aristocrat,” a spokesperson revealed.
“Whilst Playtech has made significant strategic and operational progress and is in a strong position for the future, Aristocrat’s proposal provides an attractive opportunity for shareholders to accelerate the delivery of Playtech’s longer-term value.”
But here comes the rub. There is, reportedly, a sizable group of Playtech shareholders that don’t want to accept the Aristocrat offer, and their stubborn refusal could yet see the possible takeover canned.
And so catastrophic would that be for Playtech that Sky News has reported that they are considering dramatic contingency plans, which would include breaking up the company and selling different components to separate bidders.
War in the Boardroom
It has been suggested that the group of dissenting shareholders, thought to contain a number of high-profile Asian businesspeople and investors, was one of the reasons why Jordan and JKO decided to pull the plug on their own takeover plot.
The main issue is that the rogue band of shareholders has not ‘engaged meaningfully’ with the board on their thoughts about the Aristocrat bid, which the firm’s leader believe guarantees ‘certainty and liquidity’ at a time of major upheaval.
“The absence of customary levels of engagement means that the board is approaching the court and general meetings without a clear understanding of whether these shareholders are supportive of the Aristocrat offer,” an insider revealed.
The Asian consortium owns around 20% of all Playtech shares, and the sticking point is that 75% or more approval has to be gained for the Aristocrat offer to be forced through.
While shrouded in secrecy, the group is thought to include Paul Suen – the billionaire owner of Birmingham City FC via his Trillion Trophy Asia firm – and Karen Lo, an heiress to the Vitasoy empire who is married to Eugene Chuang, an investor that has already ploughed his millions into a number of tech firms.
If they do not give the green light to Aristocrat’s proposed acquisition, it has been suggested that Playtech – which is estimated to be worth around £1.9 billion – could separate its various B2B and B2C entities, as well as the Italian market specialist Snaitech, and then put them up for sale at auction….a move thought to be backed by the firm’s financial advisers at Wells Fargo.