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In a dramatic move for the global online gaming space, Australian gaming machine giant Aristocrat Leisure has made a takeover offer of more than £2.1bn ($2.9bn) for UK gaming software and platform developer Playtech, whose board fully backs the deal.
The Playtech board “intend[s] to recommend unanimously that Playtech Shareholders vote in favour” of the Aristocrat offer at a yet-to-be-scheduled shareholder meeting, a joint Aristocrat-Playtech statement said on Sunday.
The statement said the A$29bn ($23bn) valued Aristocrat and its UK-based subsidiary that would acquire Playtech have received aggregate support from leading shareholders covering 20.7 percent of ordinary shares, meaning that remaining shareholders will be key to the deal proceeding.
Aristocrat’s offer to Playtech shareholders is 680 pence per share, or a 58.4 percent premium on Friday’s closing price of 429.2 pence.
“Aristocrat’s acquisition of Playtech is consistent with its growth strategy and will create one of the largest business-to-business platform providers in the global gaming industry,” the statement said.
“Playtech’s Real Money Gaming [RMG] experience and proven platform capabilities with Aristocrat’s leading world-class land-based and social gaming content brings [sic] together two complementary leading gaming content and technology providers,” it said.
Finalised after a year of hunting takeover targets, Aristocrat said the deal would provide it with “material scale in the already large and growing iGaming and online sports betting segment” and growth channels for land-based business and content, particularly in North America.
It added that Playtech’s Italy-based omni-channel gaming operator Snaitech will allow Aristocrat to “operate and innovate in multiple European markets”.
Aristocrat CEO Trevor Croker said: “The recommended offer is a full and fair value and reflects the strategic potential of the combination in a global gaming sector that continues to migrate online, as a result of technology and entrenched consumer-driven change.
“Adding Playtech’s talented team with Aristocrat’s established strengths and momentum will create a true industry leader in the global online RMG space, particularly in terms of our B2B capabilities,” he said.
Playtech CEO Mor Weizer said the deal would create one of the world’s largest B2B gaming platforms.
“This deal has the potential to enhance our distribution, our capacity to build new and deeper relationships with partners and bolsters our technological capabilities,” he said.
Playtech noted that the UK market is maturing amid slowing growth, while unregulated Asian market dynamics — volatile from years of heightening competition — are “becoming less favourable” and revenue has “declined materially”.
By contrast, North America beckons to the companies more powerfully, while Latin America “remains a primary market opportunity”.
It also said Playtech wants to “simplify” its operations and become a “pure-play gambling business” with the sale of its casual and social gaming interests.
Meanwhile, Aristocrat has commenced fundraising of A$1.3bn in new equity to partially finance the Playtech takeover, with Australian media reporting broker activity among larger funds in the market.
The deal will also be funded through existing cash and new debt facilities, the joint statement said.
