Playtech takeover battle fizzles out without a deal

A nine-month long takeover battle for Playtech ended on Thursday after a Hong Kong consortium declined to bid for the gambling technology company, whose shareholders previously turned down a £2.7bn takeover attempt.

Hong Kong-based TT Bond Partners’ possible management buyout of the gambling company had received the backing of Playtech’s former boss Tom Hall and its current chief executive Mor Weizer. Weizer previously told the Financial Times he may have to resign if the bid were rejected.

But in a statement, released on Thursday, TTB said it did not intend to bid for Isle of Man-based Playtech “due to challenging market conditions” after having a “put up or shut up” takeover deadline extended twice.

Playtech’s share price fell by 17.3 per cent to 426.8p in early morning trading in London on Thursday following the announcement.

TTB’s decision not to mount a bid caps one of the UK’s most heated takeover battles of recent times.

In October last year, Playtech’s board agreed a £2.7bn takeover by Australian casino business Aristocrat Leisure, which valued the shares at 680p. On Thursday, Playtech shares were trading at their pre-bid price for the first time since then.

Playtech, which provides back-end software to some of the world’s largest gambling companies including Ladbrokes owner Entain, had for a long time languished on the sidelines as consolidation swept across the betting industry.

But Aristocrat’s bid sparked interest from several rival suitors, including Hong Kong-based asset manager Gopher Investment, Playtech’s second-biggest shareholder, and an acquisition vehicle run by former Formula One team boss Eddie Jordan.

The Aristocrat bid collapsed this year after only 55 per cent of Playtech’s shareholders voted in favour of the deal, falling short of the 75 per cent threshold needed to approve the takeover.

The Takeover Panel launched an inquiry into whether a group of Asian investors, led by Playtech’s former boss Hall, had worked in concert to block Aristocrat’s bid. Hall, who ran the company from 2003 to 2005, told the FT the accusations were “rubbish” and that key details presented to the Takeover Panel were false.

Gopher, which completed a $250mn purchase of Playtech’s financial trading division Finalto this week, and Jordan’s JKO Play consortium both ended up withdrawing from the process.

TTB, which previously advised Gopher on its offer, emerged as a bidder in its own right in February, telling Playtech’s board that it would value the company above the 680p a share offer made by Aristocrat.

After announcing on Thursday it would not bid for Playtech, TTB said in a statement it “[remained] supportive of the board, the executive management team, their strategy for Playtech and the prospects for the business”.

Weizer and Hall said in a joint statement that it was “disappointing” their work with TTB “has not evolved into a formal offer”.

“Challenging global economic and market conditions which were not present in February made it impossible to create the right structure for a new company,” they added. Hall will remain as a Playtech investor and Weizer will stay on as chief executive.

Brian Mattingley, Playtech’s chair, said the bidding process had “shone a spotlight on the fundamental premium value of Playtech’s businesses and the board will continue to consider options to maximise value for all shareholders”.