The CEO of Aristocrat Leisure has confirmed that the company plans to proceed with a move into the online casino space – just weeks after their takeover bid for Playtech was rejected by shareholders.
Addressing stakeholders at the firm’s AGM, Trevor Croker confirmed plans to move into online gaming in the near future – adding to their existing slot machine and social gaming divisions.
The new outfit is already under construction, with former Aristocrat Gaming CEO Mitchell Brown moving internally to lead the early phase – all of which suggests plans to launch a bid for another software development firm like Playtech has been put on the backburner.
Croker spoke of a ‘build and buy’ approach to accelerating Aristocrat’s access to the market, which will extend from their native Australia to Europe and North America. They intend to invest heavily on their own ‘real money’ platforms, while potentially acquiring other companies that can help them to take a chunk out of their target market.
“Achieving a scaled position in online RMG will be a medium-term effort,” he confirmed.
“It will take sustained investment over a number of years. However, our record shows that Aristocrat knows how to successfully scale businesses.
“We have clear advantages in our powerful product portfolio, strong customer and regulator relationships, full financial optionality and strategic rigour. We are excited to be wasting no time in implementing our plans, and initiating investment in the current business. We will provide more detail on our strategy and key priorities at our half-year results in May.”
Back to the Drawing Board
Under UK takeover law, Aristocrat are unable to return with a second bid for Playtech for the next six months. Their first offer was rejected by 45.32% of shareholders, which is enough of a quota to prevent such a motion from being approved – despite the fact that the firm’s board had recommended that the bid, thought to be worth more than £2 billion, be accepted.
It turns out that the rejection came largely from a group of Asian shareholders who had acquired a ‘blocking stake’ of shares just weeks previously, and now they – alongside former Playtech bigwig Tom Hall – are thought to be launching a takeover motion of their own.
However, Playtech have waivered the usual block on subsequent takeover bidding, and it’s not impossible that Aristocrat might make a play for its B2B business – the software firm’s leaders confirming that selling divisions of the company individually, rather than one lot, might be the way that they opt to go.
At the time, Croker said that he and his fellow Aristocrat chiefs were ‘actively considering’ other options, and with $2 billion burning a hole in their pocket why wouldn’t they be.
“We are disappointed that our recommended offer to acquire Playtech plc is expected to lapse,” he confirmed.
“Notwithstanding extensive due diligence on Aristocrat’s part, developments since the announcement of our offer have been highly unusual and largely beyond Aristocrat’s control.
“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.”