As far as acquisitions go, Aristocrat’s purchase of Playtech has been run of the mill. There has been back-and-forth over price and even a few unexpected bids appearing. None of that was enough to cause the deal to lose focus. However, the sudden interest in Playtech stock out of Asia has both companies raising a red flag. They now want regulators to get involved to get to the bottom of it.
Too Many Investments in Playtech
Sky News reveals that Playtech and Aristocrat have asked the Panel on Takeovers and Mergers in the UK to decide if a group of Asian investors is acting as a concert party. The concern is that the investors, instead of acting independently, are joining forces and will ultimately pool their Playtech resources.
Playtech has also asked the takeover watchdog to inquire about the intentions and plans of the Asian investors, which includes the owner of Birmingham City Football Club’s soccer club.
Market-watchers have been baffled lately by heavy stake building in the Far East. Moreover, the investments are going for much greater than the 680-pence-per-share ($8.99) offer Aristocrat is paying for Playtech.
The Asian investors, which also include wealthy Chinese heiress Karen Lo, are thought to now have more than 20% of Playtech’s shares. And they may even have enough collective ownership to stop the Aristocrat deal.
Playtech has to have at least 75% of its voting shareholders support the Aristocrat bid per the terms and conditions of its offer.
Ulterior Motives Possibly Behind Purchases
Sky adds that people familiar with the businesses and the transaction said they were “mystified” at the intentions of Asian investors. They also suggested Tuesday that they may be interested to acquire Playtech’s unregulated gambling companies in Asia.
Aristocrat has indicated in its offer documentation that it will “not operate in, or provide services into, any market that would jeopardize the combined group’s existing licenses,” adding that it would review the sale of any business or operation it deemed to be at high risk.
An unidentified source told Sky that it would be difficult for the Takeover Panel to extract sufficient information in order to be able to decide whether the Asia-based investor were colluding. If they are, according to the terms of the acquisition, they could automatically enter a counteroffer if they hold more than 29.9% of Playtech.
There’s still another candidate that could make a play for Playtech. Eddie Jordan, the former F1 team owner, and JKO announced in November that they might be interested in making a bid. JKO now has until January 5 of next year to submit a formal deal, or it will lose its place.