Aristocrat Undeterred About Real Money Games Participation as Playtech Deal Collapses

Posted on: February 2, 2022, 10:25h. 

Last updated on: February 3, 2022, 09:42h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

Playtech shareholders have decided that selling the gaming software company to Aristocrat Leisure isn’t a good idea. However, the Australian gaming operator isn’t giving up on its real-money gambling ambitions.

Aristocrat Leisure
Aristocrat Leisure is moving on. It will look for other RMG acquisition possibilities after Playtech shareholders rejected its bid. (Image: The Market Herald).

Aristocrat had submitted an offer to purchase Playtech months ago, enticing the latter’s shareholders with a $2.84-billion buyout. While the deal initially seemed to draw interest, later developments drew questions.

There were reportedly some Playtech shareholders in favor of the deal. However, JPMorgan analysts asserted late last week that these were in a small minority. The analysts were right, with Playtech announcing today that the acquisition is off the table.

At least 75% of Playtech’s shareholders would have needed to approve the arrangement for it to advance. By the time voting was complete, less than 55% had shown their support.

Playtech Bidding Wars

Interest in Playtech grew rapidly following Aristocrat’s offer last year. Gopher Investments, the company’s second-largest shareholder, joined the bidding wars before backing down in November. It, instead, purchased Playtech’s financial arm, Finalto.

JKO Play also entered the race. The company, co-founded by former Formula 1 owner Eddie Jordan, stayed around the longest before it backed down last month. Playtech had even moved the shareholder vote on Aristocrat’s deal to today in order to give JKO more time.

Jan. 12 was the original date for the vote.

Aristocrat Boss Not Giving Up

Trevor Croker, Aristocrat’s CEO and managing director believes he knows where things began to fall apart. After the company presented the deal, a small group of Asian investors began to purchase Playtech shares at a huge premium. There was little reason for the stock purchase at the time, other than to potentially block the sale.

The emergence of a certain group of shareholders who built a blocking stake while refusing to engage with either ourselves or Playtech materially impacted the prospects for the success of our offer,” said Aristocrat CEO Trever Croker ahead of the Playtech shareholder vote.

Croker was already working on Plan B before the results of the Playtech vote were made public. The company is still going to be part of the real-money games (RMG) segment, a goal it has had since last year.

With money in hand, Aristocrat will now begin to explore other potential RMG targets for its money.  “Our focus now shifts to accelerating our plans for alternative online RMG scaling options,” said Croker, adding, “We look forward to sharing more details with shareholders as we move forward.”