Playtech DraftKings Deal On The Cards?

Investor activist Jason Ader has his sights set on Playtech and DraftKings merging into one company. Ader has a long history of involving companies into such deals, his investment vehicle SpringOwl Asset Management has invested in and other gambling companies with similar outcomes.

When SpringOwl Asset Management where a major investor in Bwin.Party he managed to convince 888 Holdings into making an offer for their competitor only to then see GVC Holdings make a more attractive move for Bwin.Party and acquire the former gambling giant in a deal back in 2016.

Also his investment company had a large share in Stars Group and pushed for the company to look for a merger which happened when Flutter Entertainment moved for a merger which the deal completed earlier this year.

So Ader who once sat on the board of Las Vegas Sands for eight years as a casino anaylst prior to founding his investment company knows a good deal when it comes and this time he is pushing for Playtech and DraftKings.

With DraftKings reporting recently of disappointing results with more losses but still valued at some $12 billion and Playtech a leading software company to the gambling industry posting earnings of $453 million in its recent set of results and under-valued at $2 billion Ader sees a good opportunity.

In a recent interview Ader said, “They should be making a stock-for-stock deal with Playtech, if I were on their board, that’s what I’d be saying.”

It also appears DraftKings are open to the idea or at least the idea of more acquisitions or mergers following the recent deal for SB Tech. Indeed their Chief Executive Officer Jason Robins indicated on a recent conference call on the companies results by saying, “There could be some opportunities that perhaps would not have otherwise presented themselves, but might, given the events in the last few months,” he went on to say, “We are also very bullish on the overall market, and if we can find assets that are very complementary — that as we grow in our core businesses we also see growing alongside it — that’s something that could also be attractive.”

Many believe DraftKings is currently overvalued and by acquiring other more productive businesses it would help with its share price, Ader said on this, “DraftKings is wildly overvalued just on every metric and a Playtech deal could bring in an additional 100 million euros in annual profit, if the combined companies were run more efficiently, he then said in closing, “That’s damn close to justifying in its valuation.”