Aristocrat fails in $3.9bn takeover bid for Playtech

Aristocrat Leisure has failed at the last hurdle to close the $3.9bn acquisition of British gambling software group Playtech.

Aristocrat Leisure CEO Trevor Croker: ‘Developments since the announcement of our offer have been highly unusual and largely beyond Aristocrat’s control.’

Aristocrat Leisure has failed at the last hurdle to close the $3.9bn acquisition of Playtech after it became clear the deal did not have the required support of 75 per cent of the British gambling software group’s shareholders.

In a statement late on Wednesday, Aristocrat chief executive Trevor Croker said he was disappointed the takeover would lapse despite it attracting the backing of a majority of investors.

“Notwithstanding extensive due diligence on Aristocrat’s part, developments since the announcement of our offer have been highly unusual and largely beyond Aristocrat’s control,” Mr Croker said.

“In particular, 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, which had been recommended by (the Playtech board).”

Aristocrat had previously faced down a potential rival bid from Irish businessman and Formula One racing identity Eddie Jordan through his JKO Play vehicle. Mr Jordan, in late January, said he was no longer interested in buying Playtech.

Playtech, which was founded by Israeli billionaire Teddy Sagi in 1999, has an option to acquire a large holding in Mexican gaming firm Caliente. Its main business, however, is the provision of online casino and poker rooms, as well as mobile gaming.

In October, Mr Croker said the company had received “irrevocable undertakings from Playtech shareholders”, including its largest investor – which has a 20.7 per cent stake – to vote in favour of the scheme.

A bloc of Asian investors, led by Playtech’s Hong Kong-based former chief executive, Tom Hall, was expected to be unsupportive of the takeover offer. Investors from Asia who had amassed shares amounting to about 28 per cent of the company included Paul Suen, the owner of Birmingham City Football Club, Karen Lo, the billionaire heiress, and Stanley Choi, the professional poker player.

Aristocrat lobbed its bid in October, an offer described as “transformational” by local equities analysts. The company engaged Goldman Sachs and UBS as advisers on the transaction.

Mr Croker said the company was focused on capital markets activity that was in the long-term interests of shareholders.

“We will always take a highly disciplined, strategic approach to our investment choices, consistent with our customer-centric philosophy,” he said.

“Aristocrat has entered into 2022 with excellent operational momentum, flexibility and resilience with continued strong product-led performance across gaming and Pixel United.

“From a strategic perspective, Aristocrat’s commitment to participate in the online segment will not change.”