The takeover offer of Aristocrat Leisure for Playtech failed to get the necessary support from the British gambling software company’s shareholders who turned down the £2.1-billion acquisition bid of the Australian gambling operator.
The proposed acquisition offer had to get support from 75% of Playtech shareholders at their meeting on February 2nd in order to be approved. However, the takeover bid was favoured by less than 55% of shareholders’ votes, which basically made one of the most-expected deals of the year impossible.
After confirming the rejection of Aristocrat Leisure’s acquisition bid, Playtech revealed that it was considering other approaches but it did not provide more details on the matter. The Australian gambling operator, on the other hand, will not be able to make another acquisition offer to Playtech for 6 months.
According to Sky News, the British gambling software provider could receive a takeover offer from the Hong Kong-based investment firm TT Bond Partners, which had acted as an advisor on an earlier bid for Playtech’s assets made by Gopher Investment. However, at the time, the board of the British online gambling firm has granted a request to release the company from restrictions that would potentially prevent it from approaching Playtech with an acquisition offer itself.
Playtech refused to make comments on the Sky News report. The company’s share price marked a 5% increase after it confirmed the consideration of other takeover offers.
Aristocrat Leisure Needs a Plan B to Capitalise on North America’s Online Gambling Expansion and It Needs It Now
Trevor Croker, the CEO of Aristocrat Leisure confirmed that the company’s acquisition bid was turned down at Playtech’s shareholder meeting on February 2nd. However, during an investor call earlier today, he played down the significance of the decision, saying that the Australian gambling company was not in a hurry to add more assets to its portfolio. Mr Croker also noted that getting the investors’ approval would have been great but there was still time to make a move that would fill in the gap left after the failed deal.
Aristocrat Leisure’s share price fell by about 2.5% in early trading on February 3rd, but they managed to recover right before the close. The company’s shares have experienced a 10.5% decline over the past month.
After Aristocrat Leisure got its acquisition offer rejected by the shareholders of Playtech, the Australian gambling operator would now have to seek a Plan B in order to capitalise on the online gambling expansion in North America.
Had the proposed deal with Playtech been successful, it would have provided the company with an opportunity for quicker expansion in the US market, especially considering the fact that the British gambling software provider currently operates the biggest purpose-built live casino in the real-money gambling (RMG) sector and is one of the largest online gambling software suppliers on a global scale.
UK Gambling Companies Become Potential Targets in Merger and Acquisition Spree
The beginning of the Covid-19 pandemic triggered an enhanced interest in mergers and acquisitions in the gaming and gambling sector, especially when it comes to online gambling operations, which saw its popularity enhanced as a result of lengthy coronavirus lockdown around the world.
UK bookmakers have been among the major takeover targets in the merger and acquisition spree, with potential suitors seeking to acquire the British gambling operators’ expertise in the field, especially with the liberalization of the US sports betting sector.
Playtech became a target of interest for a number of companies in 2021. Apart from Aristocrat Leisure, the British online gambling software developer was approached by Gopher Investment, which is currently its second-biggest shareholder, and by JKO Play consortium, headed by Eddie Jordan, a former Formula One team owner. As Casino Guardian previously reported, Aristocrat Leisure had asked the takeover regulatory body of the UK to rule whether a group of Asian investors, who had acquired large stakes in the company, were acting in concert in a potential violation of the country’s takeover rules.
Olivia Cole has worked as a journalist for several years now. Over the last couple of years she has been engaged in writing about a number of industries and has developed an interest for the gambling market in the UK.