Playtech Aristocrat Takeove Delay

Will JKO Play come in with a stronger bid Playtech? What will be the consequences? And is Aristocrat prepared to make a larger bid? (Photo by absolutvision on Pixabay)

iGaming software development company, Playtech, has announced that the deal involving a takeover by the Australian casino and video slots giant, Aristocrat, has now been put on hold. Playtech, which was founded and is owned by the Israel-born billionaire, Terry Sagi, was expecting to sell control of its assets to Aristocrat, in a deal thought to be worth £2.7 billion (US$3.65 billion), but now, the deal looks to be anything but certain.

It is a deal that has been the subject of the iGaming market for quite some time now and marred with all kinds of controversy. Firstly, Gopher Investments from Hong Kong attempted to put a spanner in the works with a competing bid, but we can only assume that sure to the firm’s lack of experience, or simply because of Aristocrat’s far superior experience in the gambling market, the Hong Kong firm soon withdrew. There was then news of a Chinese investor buying shares at well over the odds, which for some paranoid minds was seen as a possible hijack. And who can blame them in the dog eat dog world of share trading where we have seen the same moves results in surprise takeover bids. Now the next piece of news to unsettle the deal is the possibility of delaying the shareholder vote due this month.

Inevitably, and maybe Playtech bigwig’s intention, the delay has spiked interest from other potential suitors, with JKO Play thought to be a genuine candidate to take over the deal. Back in November, JKO Play showed a genuine interest in acquiring the software development company but was beaten off by the larger Aristocrat offer of £2.7 billion. Playtech shares are now trading at 720.85 GBX, which is significantly higher than what Aristocrat initially offered, which was 680 GBX per share. Again, a rise in shares after marked interest in a company has usually meant that the original offer, in this case, Aristocrat, is not enough and the bid needs to increase. Should Aristocrat want to continue its Playtech acquisition ambitions, we suspect that £2.7 billion isn’t going to cut it.

All that being said, Playtech has stated that Aristocrat are still the frontrunners to finalise the deal but has admitted that talks are ongoing with JKO Play, and progressing well. JKO has asked for a little extra time to come up with a suitable proposal, which led to the delayed shareholders’ meeting. Meanwhile, Aristocrat is digging in its heels and remains resolute that its bid is firm and final. Yet, we have heard all this before in other deals not just in iGaming, but in the financial section of newspapers and online publications. Our prediction is JKO Play will come in with a higher bid if it is to put that spanner in the works. Meanwhile, one would presume Aristocrat is expecting and is likely preparing a second proposal in case JKO Play does manage to turn Playtech’s heads – something it appears the company has already managed to do, regardless. In the end, this deal gets tastier and we’ll be following it closely.

The Playtech casino software provider’s shareholder meeting due to be held on 12th January has now been rescheduled to the later date of 2nd February. This delay might just be enough time for JKO Play to weigh up any potential late bid to snatch the deal away from Aristocrat.