Hedge fund Odey Asset Management (Odey AM), the largest shareholder in Playtech takeover target Plus500 is set to oppose the £460 million takeover bid put forward by the igaming technology provider last week.
Odey AM has slammed the offer made by Playtech, labelling the bid as “opportunistic”, since it exploits Plus500’s current UK trading difficulties. Odey further noted that Playtech 400p a share value, was well below the 750p level at which Plus500 traded at mid-May.
At present Plus500 sees itself at the centre of an anti-money laundering investigation by the UK Financial Conduct Authority (FCA). The regulator has halted Plus500’s abilities to trade and service transactions, which has seen the company’s share price freefall.
The hedge fund who are led by Crispin Odey currently owns 25% of Plus500 shares, the firm is reported to have gone against Plus500’s management decision, who had backed Playtech’s 400p per share offer.
Playtech governance issued a statement refuting Odey’s claims, and further stating that the hedge fund’s claims against them were “weak and not categorical”
Plus500 recently reported pre-tax profits of $138 million (£89.9m) for 2014, more than double its earnings in the prior year, which it attributed to rising market volatility that lifted trading volumes.
It is unknown whether Playtech governance will revise its bid for Plus500. The planned acquisition would see Playtech increase its profile and business services within the financial trading sector, following its April acquisition of forex and binary options trading platform Trade FX.