JKO withdraws from Playtech bidding contest to pave the way for Aristocrat takeover

JKO Play has confirmed that it will not meet the deadline to make a firm bid for Playtech, leaving Aristocrat as the sole bidder for the majority shares in the gaming firm.

Issuing an update this morning, the Eddie Jordan family and Keith O’Loughlin owned company – which controls a 0.51% stake in Playtech – revealed that it would be withdrawing its hat from the ring.

This has paved the way for Australian-listed gambling group Aristocrat to complete its acquisition of Playtech, an intention it first made clear in November 2021 with a £2.7 billion bid, or 680 pence per share. Should Aristocrat be successful, the date of the merger has been earmarked as during the second quarter of the year. 

Aristocrat’s offer represented a 58% premium on Playtech’s closing price at the time of the bid announcement, with the Australian company planning to fund the all-cash transaction through a £864 million equity raising round in addition to existing cash resources. 

The bid has held the long-term support of the Playtech board, which has continuously  recommended the firm’s shareholders accept the offer despite extending JKO’s deadline to make a firm bid from 5:00pm on 5 January 2022 to 5:00pm on 26 January, after adjourning its Court Meeting and General Meeting to 2 February .

Although backing Aristocrat’s deal as the ‘preferred option’, Playtech’s board twice granted JKO an extension to submit its deal as Jordan was reported to be finalising a reported £3 billion counter offer funded by New York private equity fund Centrebridge and former Party Gaming co-founder Vikrant Bhargava. 

A Playtech statement at the time of the second extension read: “Despite any adjournment of the Court Meeting and General Meeting, there remains no certainty that JKO’s approach will result in an offer for the Company, nor as to the terms on which any offer might be made.

“The Playtech Directors continue to recommend unanimously that Playtech Shareholders vote in favour of the Aristocrat Offer at the Court Meeting and in favour of the Playtech Resolutions to be proposed at the General Meeting.”

The development marks a second milestone in Aristocrat’s takeover plans, following the sale of Playtech’s Finalto trading division to Gopher Investments early last month, a key requirement of the acquisition offer. 

Should Aristocrat successfully complete the merger, it has detailed an ambition to bolster its position in the European gaming sector via leveraging Playtech’s Snaitech subsidiary – which maintains a strong presence in Italy.

Additionally, the company has underscored plans to strengthen its revenues, expand its customer reach and provide material scale to its online gaming operations. 

However, JKO still reserves the right to set the restrictions aside with the agreement of the Playtech board, if a third party announces a firm intention to make an offer, if the gambling tech firm announces a whitewash proposal, or if there has been a material change of circumstances under rule 2.8 of the ‘Takeover Code’.

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