Playtech Plc Shares Tumble 21% After To Bid Withdrawals

Shares in London Stock Exchange-listed Playtech Plc plummeted almost 21% after JKO Play officially withdrew from the takeover race.

The path to acquiring Playtech Plc looks clear for Australian firm Atrisocrat after two potential rivals withdrew from the race. Gopher Investments officially removed its hat from the ring a few weeks ago. JKO Play pulled the plug this week.

JKO Play, fronted by former Formula One racing boss Eddie Jordan, decided against making a formal bid for Playtech Plc. Takeover rules in the United Kingdom dictate JKO Play is unable to bid for at least six months.

“Our team worked tirelessley to assemble a bid that would create value for Playtech’s shareholders and open an exciting new chapter for the business. I’m immensely proud of the energy devoted to this project by our advisory team and partners and of the close relationship we have built. We continue to evaluate a number of opportunities in the gaming and associated technology sectors, where we see exciting growth prospects in a number of international markets,” a statement from the group read.

The statement does not state why JKO pulled the plug on any Playtech Plc bid. Jordan and Keith O’Laughlin, the latter formerly of Scientific Games, enlisted the help of Global Leisure Partners (GLP) to look into a potential deal. GLP neglected to shed any light on the situation, too.

Media reports suggest JKO had concerns about a group of Asian investors who had become major Playtech Plc investors. Reports suggest these investors oppose the bid. Gopher Investments now control 27% of Playtech, giving them considerable voting power. No party confirmed Gopher Investments is the Asian investors worrying JKO.

Playtech Plc Shares Plummet

Playtech Plc shares changed hands at 423.80 pence per share on October 14. This was before any takeover rumours circulated. Those shares soared to 675.00 pence per share on October 19 when bids entered the public domain.

The shares peaked at 770.00 pence per share on November 18 and have remained in the 700s since. However, JKO Play officially pulling out of the Playtech Plc acquisition sent the share price tumbling. The company lost 20.67% of its value in one day’s trading on the London Stock Exchange!

Trading volumes on January 21 were three times higher than the daily average. This is because investors dumped stock at alarming rates. Records show an £862,380 sale and one tipping the scales at £2 million. The big players got out of Dodge quickly.

Aristocrat Bid Still Going Ahead

JKO Play and Gopher Investments pulling out leaves Aristocrat as the only bidders for Playtech Plc. Aristocrat’s share fell 3.40% on Friday as some investors got cold feet regarding the huge takeover. They are asking themselves why two major companies withdrew bids. Companies tend not to do this unless something is wrong behind the scenes.

Aristocrat issued a statement to the ASX from its Sydney headquarters.

“The Playtech Plc Board Recommended Acquisition remains the only firm offer available to Playtech shareholders, despite the substantial amount of time provided to potential bidders to make alternative proposals. Aristocrat further confirms that the regulatory approvals process remains well on track. It is committed to completing the acquisition as quickly as possible. Aristocrat reiterates that the terms of the Recommended Acquisition provide full and fair value for Playtech shareholders, with attractive cash certainty.”

“We also note comments in Playtech’s announcement regarding a number of material investors who have not to date engaged meaningfully about their views on the Recommended Acquisition. Aristocrat urges all Playtech shareholders to vote in favour of the Recommended Acquisition at the relevant shareholder meetings to be convened on 2 February 2022 (UK time).”

“Aristocrat further urges the Playtech Board to take all available steps to deliver a transaction with Aristocrat that facilitates Playtech shareholders receiving full and fair value for their investment.”