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Aristocrat Takeover Bid Rejected by Playtech Shareholders

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Shareholders of the London-listed gambling software group, Playtech torpedoed an expected takeover bid last week.

The Australian gambling company, Aristocrat had its $2.94 billion offer rejected after it failed to gain the approval of 75% of Playtech shareholders at a special meeting held for the takeover vote. As little as 55% of shareholders voted in favor among the 78% of shareholders who voted. This was despite the fact that Playtech encouraged its stakeholders to accept the Aristocrat offer.


"The board reiterates its recommendation that shareholders vote in favour of the offer from Aristocrat,” called the Board. "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."

All Options Open

All options are now back on the table and Playtech said that it would consider new offers if and when they come up.

The chairman of Playtech, Brian Mattingley, noted that he was not overly-disappointed about the failed takeover since it “highlighted that the company is valuable”.

According to the Financial Times, Playtech has struggled to find serious bidders in the past due to the complicated nature of the company’s operations which sell back-end software to gambling groups. Potential bidders may also be concerned because of Playtech’s activities in Asia where it works in unregulated markets.

Aristocrat had its bid shaken in November last year after Playtech heard of a new interest from Gopher Investments, the group’s second-biggest shareholder. While Gopher Investments eventually pulled out from the bidding race, it purchased Playtech’s financial trading division, Finalto.

Another bidder, former Formula 1 boss Eddie Jordan also pulled out of the race last month after he understood that he would not have the support of Playtech shareholders.

Playtech Plays Down Takeover Failure Bid

The chief executive of Aristocrat, Trevor Croker played down the significance of the failure of the company’s offer. He said he although it would have been the most preferable outcome to have the Aristocrat bid approved, the company will move forward and check out other options.

“We have both the capacity to invest in our own business and also pursue other alternatives ... There are a number of listed companies [similar to Playtech], but there are also a lot of technology businesses and platforms that are unlisted,” said Croker. “We can see options to achieve our objective.”

The market reacted to the failed bid in different ways. Aristocrat investors pulled the company’s shares down 2.5% although the company quickly recovered. Analysts report that Aristocrat’s core business is performing well and investors are giving management the opportunity to find other options that are similar to Playtech.

In the meantime, Aristocrat is now allowed to bid for assets that Playtech puts up for sale, if it decides to put parts of the company on the market.

It has been predicted that Playtech directors and the group’s investment banking advisors are discussing the option of a full break-up of Playtech. Its Italian arm, Snaitech and its business-to-business division could be sold separately.

Sky News reported two weeks ago that Playtech’s board and advisers have already started making plans to auction these operations.

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