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Aristocrat’s acquisition scheme of Playtech released
The scheme document for Playtech‘s purchase by Aristocrat has been released, offering specifics on the transaction – including its grounds for approving the acquisition.
Aristocrat agreed to buy Playtech for £2.7 billion (€3.1 billion/$3.7 billion) last month. However, the transaction might yet be seized when Gopher Investments, a Playtech minority stakeholder, placed its own proposal.
The document, which was released on November 12th, listed the primary reasons Playtech’s board supported the transaction, one of which being Playtech’s “significant transition” to newly regulated markets. According to the scheme document, this was owing to slowed UK market growth and changing market dynamics in Asia, which indicated Asian income had decreased “substantially” and the UK was no longer Playtech’s primary source of revenue.
The considerations also said that Playtech’s shares are doubtful to trade at the value of Aristocrat’s offer – 680 pence per share – in the coming years, especially given the time it may require for Playtech’s growth plan focused on these areas to be realized.
Given the offer price and the supplier’s new-market-focused strategy, the board of directors stated that the purchase would enable Playtech shareholders to “obtain certainty and liquidity for their investment,” instead of having to wait for Playtech’s shares to reach 680 pence when these new markets mature.
Aristocrat also included details in the paper on how the business merger will influence employment and management at Playtech. In order to fully comprehend Playtech’s potential, Aristocrat will perform an assessment of its business and product sectors. According to the scheme document, “some operational and administrative restructuring may be required” when the firms merge, but the effect on employment would be minimal.
Moreover, according to the scheme document, Aristocrat made three rejected advances to Playtech, the third of which saw Playtech reveal details about its company instead and initiate a fourth proposal, which was subsequently accepted. The agreement is still reliant on the sale of Finalto to Gopher, a feature that might be critical considering Gopher’s own proposal.
The $250 million (£186.2 million/€215.5 million) sale of Finalto to Gopher Investments was completed in September, with Playtech hailing it as the “end of an extensive process.”
Finalto was placed up for sale in March and was set to be offered to a team headed by the Barinboim Group in May in a deal allegedly for $210 million (£148 million/€171 million). Shareholders, though, rejected this deal, most likely given the availability of a greater proposal from Gopher.
The purchase would need to be authorized in numerous nations, including Austria, Italy, Spain, and Germany, in addition to the United Kingdom.
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