An expression of interest from the Eddie Jordan backed JKO Play appears to have persuaded Gopher Investments not to pursue their interest in buying Playtech.
The investment firm has officially withdrawn from the contest to acquire the casino software brand, leaving Aristocrat Gaming as the only formal bidder left in the hunt – despite Jordan’s admission of last week.
It’s a surprising twist, given that Gopher already owns a 5% stake in Playtech and was considered the frontrunner to get an acquisition deal over the line.
They were rumoured to be plotting a £3 billion offer, which would have superseded Aristocrat’s standing £2.7 million bid – market rules allow for rival takeover bids to be placed when they are 10% or higher the outstanding offer.
The Hong Kong based operation is already in talks with Playtech to purchase their financial trading platform, and has confirmed that deal will still go ahead.
“Today’s announcement has no bearing on Gopher’s agreement to acquire Playtech’s financial trading division, Finalto. Gopher remains fully committed to the acquisition,” they revealed in a statement on Monday.
The equity firm is allowed to re-enter the race should Aristocrat’s bid not get past a shareholder vote, although the timing of their withdrawal suggests that Gopher are not interested in becoming embroiled in a bidding tug-of-war.
A Two Horse Race
Given its status as one of the most trusted suppliers of software in North America, it’s no wonder that Playtech is being so eagerly fought over.
They already have some big clients on board, including the Flutter group and bet365, and with gambling laws in the USA continuing to be liberalised, expansion into a market with untold potential seems likely.
As it stands, Aristocrat leads the race for Playtech by a nose. They have first-mover advantage, having had that £2.7 billion offer approved by the company’s board – it is now pending shareholder sign-off and due diligence.
Monday was momentous for Aristocrat, the Australian slot machine company, on two levels. Firstly, a major competitor in Gopher Investments dropped out of the race, and secondly the caveat to their own offer – that Finalto is sold off to Gopher prior to the Playtech deal being completed – looks to be going ahead as well.
But like a schoolboy fight in the playground, firms tend to make bold public statements to see if their rivals buckle, and it’s telling that Gopher dropped out of the bidding war barely 72 hours after JKO Play announced their own interest to get involved.
Backed by the considerable wealth of Jordan and the US private investment group Centerbridge Partners, JKO Play have deep pockets to work with and will be able to come up with the £3 billion bid that would, presumably, knock Aristocrat out of the game.
Jordan is working with former Scientific Games and BoyleSports supremo Keith O’Loughlin on the JKO project, and they have approached Playtech in an attempt to secure the necessary due diligence upon which a formal offer would be tabled.
Playtech have since confirmed that their ‘discussions’ with JKO Play are at an early stage, although it is not yet known whether a formal bid has been made or if Jordan and his team are simply testing the water.