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Is an Asian Concert Attempting to Block Aristocrat Acquiring Playtech?

An Asian group of investors has paid over the odds for 20% of Playtech’s shares. Is this an attempt to block Aristocrat acquiring Playtech? (Image by AhmadArdity at pixabay.com)

Aristocrat and Playtech have asked London’s Takeover Panel to investigate the intentions of a group of Asian investors that have been paying over the odds to accrue shares in the London-listed Playtech. The firms believe the group which now has close to 20% ownership of the company might be a concert party looking to block Aristocrat from purchasing the company or owning enough shares to make a mandatory bid of their own.

It’s been a topsy-turvy couple of months since it was first announced on the 18th of October that Aristocrat had confirmed an AU$5 billion/UK£2.1 billion (US$3.7 billion/EU€3.1 billion) offer to acquire the Playtech brand. Just a few weeks later, Gopher Investments, a Hong Kong Investment firm, threw its hat into the ring with a slightly larger offer before withdrawing that offer two weeks later. The company, which is a 4.97% shareholder in Playtech, instead wanted to focus on acquiring Playtech’s financial trading arm, Finalto. That $250m acquisition is expected to close at some point in the second half of 2022.

As it stands, that leaves Aristocrat as the frontrunner to acquire the leading virtual and live casino game’s developer, although it looks increasingly likely that JKO Play, a software company headed by Eddie Jordan, is set to make an offer. Rumours suggest the group will put in an offer of around UK£2.73 billion.

However, that could all change amid recent news that an alleged Asian concert is attempting to hoover up as many Playtech shares as possible. According to Sky News, a group of Asian investors have been buying shares at well over the 680p share price that Aristocrat has agreed to pay for Playtech. That group includes Paul Suen, the owner of Birmingham Football Club in the UK, and Karen Lo, a billionaire heiress.

A concert would need to own 25% of the company to have enough power to veto any acquisition. This is because of the terms of the deal issued by Playtech which states it would require a minimum of 75% of shareholders to vote (a vote taking place on the 12th of Jan, 2022) in favour of the Aristocrat takeover. Furthermore, if the concert acquired 29.9% of the company’s shares, it would trigger a mandatory offer of their own.

What Could be the Motives of this Alleged Concert?

This is what is confusing market experts and the two companies themselves and is why they have approached the Takeover Panel to seek clarity over the group’s actions. One theory that holds water is that the group is against Aristocrat’s stance against operating in unregulated markets. Playtech has many unregulated businesses that operate within Asia, and this group might want to block the sale or attempt to acquire them for themselves. Aristocrat has clarified via its offer proposal that it would not risk its current licenses by providing services in unregulated markets.

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