Aristocrat says rival suitors have had plenty of time to bid for Playtech

Aristocrat has hosed down speculation of a rival bid for Britain’s Playtech, saying potential suitors had plenty of time to show their hands.

Aristocrat Leisure CEO Trevor Croker believes Aristocrat’s $3.9bn bid for Playtech offers Playtech shareholders certainty.

Poker machine giant, Aristocrat Leisure, is shrugging off potential competition it faces in its $3.9bn bid for British software player Playtech, saying it is the only party to submit a firm proposal for the group and rival suitors have had plenty of time to advance offers.

Playtech threw Aristocrat a last minute hurdle on Wednesday, telling its investors it was continuing discussions with potential rival bidder, JKO Play, run by Irish businessman and motorsports identity Eddie Jordan.

Playtech and JKO have requested more time from Britian’s Takeover Panel to develop terms of a potential offer. JKO now has until January 26, UK time, to submit a bid, ahead of a shareholder meeting on February 2.

But Aristocrat says JKO has already had plenty of time to advance its offer.

“Aristocrat’s recommended acquisition remains the only firm offer that has been made for Playtech,” Aristocrat said in a statement to the ASX.

“Aristocrat further notes that any other potential bidders have already had a substantial amount of time to make an alternative proposal for Playtech. The decision to further delay the relevant shareholder meetings extends the period of uncertainty for all Playtech stakeholders.

“(Aristocrat’s) recommended Acquisition provides attractive value in cash and enhanced regulatory and financial certainty for Playtech shareholders.”

Aristocrat also highlighted it had support from proxy advisors and looked set to gain regulatory approvals.

“Aristocrat is pleased to note the recent recommendations to Playtech shareholders from proxy advisers to vote in favour of all the resolutions to implement the recommended acquisition.

“Aristocrat further confirms that the regulatory approvals process remains well on track, and it is committed to completing the acquisition as quickly as possible.”

Aristocrat shares are trading more than 3.4 per cent lower at $43.74 at 11.15am AEDT.

Speculation has been mounting since November of a JKO bid, but it is yet to submit a proposal. In the past three months, Playtech shares have surged more than 68 per cent to 722 pence ($13.49).

Sky News in the UK had reported a firm founded by Mr Jordan, who once owned a F1 team bearing his name, is working with a US-based investor – thought to be Centerbridge Partners – on funding a takeover offer for Playtech. The consortium, also includes former Scientific Games executive Keith O’Loughlin, who left the business earlier this year to work with Mr Jordan.

Playtech had previously given JKO until January 5 to progress its bid ahead of a shareholder meeting originally scheduled for next week.

“Given the circumstances, the board consider it to be in Playtech shareholders’ interests to adjourn the (meeting) required to implement the Aristocrat offer … and to set a revised deadline, aligned to the new date for the adjourned shareholder meetings, by which JKO must clarify its intentions in relation to Playtech,” the company said in a statement late on Wednesday.

Aristocrat lobbed its bid in October, an offer described as “transformational” by local equities analysts.

At the time, Aristocrat’s deal valued the entire issued ordinary share capital of Playtech at about £2.1bn ($3.9bn) on a fully diluted basis and at £2.7bn ($5bn) on an enterprise value basis.

The acquisition comes after a tumultuous 18 months for gaming operators, with pokie venues and casinos forced to shut their doors during the Covid-19 pandemic, even powering down Las Vegas’s famed strip early in the global outbreak. At the same time, online gaming has surged.

Playtech has grown to become one of the world’s biggest online gambling software suppliers, developing platforms and content for the gambling industry operating from 24 countries. It was founded in Tartu, Estonia, 22 years ago.

Aristocrat had engaged Goldman Sachs and UBS as advisers on the transaction.

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

“We acknowledge that it is easy to get caught up looking at the historical earnings and outlook for Playtech and become cynical,” Macquarie analysts wrote at the time the deal between Aristocrat and Playtech was announced.

“With an Aristocrat lens, the opportunity is to monetise its market leading content within (real money gaming) markets globally and launch a compelling solution in North America with proven technology (Playtech) and strong customer relationships (Aristocrat).

“The total addressable market for global online RMG is sizeable at around $US70bn ($97bn) in 2020, given significant expansion in the past few years. iGaming, which includes casino, live casino, poker, and bingo, represents $US28bn of this (market), while online sports betting (including horse racing) represents $US41bn,” they told clients.