Playtech had been earmarked for takeover by an Asian based investor but that plan has since been aborted. According to an announcement made by Asian boutique investments firm, TTB Partners Limited, the company will no longer proceed with any plans on the subject as had been earlier communicated to the public.
Since February when the intentions of TTB Partners Limited were shared with the public, there has been little if any progression. No wonder the Peel Hunt analysts once described the pace as that of a ‘council of snails,’ adding that it might have been due to market volatility at the time. The investor may have downed current prospects of taking over Playtech but that does not mean that their perception of the business has changed to the negative.
Playtech is a prominent Illinois online casino games developer that has remained profitable even when the economic situation does not favor it. This time round, the casino is experiencing challenging market conditions and the investor might have sensed a hard time taming the tide.
According to a report published by Finance Magnates, the Hong Kong based company had earlier announced that the deal to acquire playtech would be initiated in February. Even before that revelation however, the management of Playtech had been reported to have declined an offer in which an Australian company, Australian behemoth Aristocrat Leisure Limited had floated of $2.8 billion.
The most recent prospective purchaser was reported to have made a decision which had been arrived at after many months of deliberations before finally having the outcome publicized ahead of the official July 17 cut-off date for an official offer. It is now clear that the management of TTB Partners Limited will no longer place any bid towards the purchase of Playtech, a company in which they hold 4.97% equity.
TTB Partners Limited is reported to have recently completed a deal through its Gopher Investments arm that involved the exchange of $250 million deal for the Isle of Man-based innovator’s Final to financial trading unit. This was cash deal that was purportedly put together in September before going ahead to garner the unanimous approval of the two company’s boards.
Details of the statement released by the management of TTB Partners Limited reveal that TTB Partners Limited are in full support of the board, the team in charge of executive management, its prospects and strategy for Playtech business. The intention of TTB Partners Limited is to support all efforts by the board that is aimed at maximizing shareholder value.
According to the Chief Executive Officer for Playtech, Mor Weizer, the company has had excellent financials in the recent past. On his part, the board is a very confident lot and is optimistic on the positive long-term prospects of the company. As an experienced executive in the business, Weizer purportedly asserted that the brand has performed well in the past and had the right momentum for moving even further in the future.
It had made sense for the company to chalk up adjusted first-quarter earnings before interest, tax, depreciation and amortization of more than $99 million thanks to the popularity of its business-to-business and business-to-consumer offerings. As section of the report published by Weizer read, “This performance reflects the quality of our market-leading technology offering and the hard work and commitment of our talented team. We remain confident in our long-term growth prospects and, in particular, our ability to benefit from the structured agreements that are already allowing Playtech to access newly-opened gambling markets.”
What we cover
A failed early exit
A while back in october, it had been reported that Playtech received a takeover offer from Aristocrat Leisure Limited based in Sydney. The arrangement would have resulted in every shareholder receiving about $9.17 for each unit of the developer’s shares. This proposal was however scuppered when it failed to get the support of at least 75% threshold, getting instead a mere 56% of target’s shareholders.
Having first opened its doors to business in 1999, Playtech has built a reputation in the gambling industry as a developer and distributor of online casino applications, automated services and games. Its reputation definitely supersedes it in whatever corner of the world it services; its current portfolio spans 170 licensees in more than 30 jurisdictions around the world.
During the period of the Corona Virus pandemic when most businesses reported a decline of business, Playtech is one of the few entities that witnessed remarkable improvement. Industry experts have explained this great performance to the fact that bettors kept placing bets in indoor spaces and away from the traditional land-based gambling establishments.
The development enterprise has a workforce of more than 7,000 and this large family is distributed around the world in 24 locations. The offerings of Playtech cover every key iGaming component including poker, bingo and sports betting in Illinois.
What happens when a suitor pulls out?
After it was made public that TTB Partners Limited is no longer interested in buying Playtech, the developer’s shares immediately suffered by 18.2 per cent tumble. This make the firm a big faller and ranks it at number 2 on the mid-cap FTSE 250 Index, a step behind the Danish consumer review website Trustpilot.
The management is also not amused by the turn of events. Current and former Playtech chief executives Mor Weizer and Tom Hall agree that they feel disappointed that the company is no longer an object of interest for the TTB investor group. Founded by Israeli billionaire Teddy Sagi, in Estonia, Playtech is not only a game developer for casino partners but also for media conglomerates such as Warner Bros and News Corp and that is the legacy they are upholding.
Conclusion
At the time of floating the offer in February, it is obvious that the challenging local market and global dynamics of conducting business were not present. Even now after the prospective investor had downed their plans, Playtech still managed to report excellent performance, partly as a result of healthy results drawn from an Italian sports betting operator, Snaitech. The management chooses to remain optimistic and focus on long-term growth prospects.
