Stalking Horse Rumours As Playtech Aristocrat Deal Set To Fail

Software giant Playtech has accepted its fate in relation to the proposed takeover bid from Australian-based operator, Aristocrat. The FTSE 250 member have been presiding over a colossal £2.1bn offer from the gaming machine manufacturer, with the company’s core shareholder group keen to strike the deal.

However, this protracted process is now inevitably doomed to failure. As well-publicized a small bloc of Asian investors, who shares account for approximately 28% of the company’s portfolio, have moved to block the acquisition in refusing to talk to either Aristocrat or Playtech. This has been a continual source of frustration for both companies in recent weeks, with no tangible reason surfacing as to why this group have compromised the deal going through.

Speculation mounts across the industry, with some commentators suggesting that an alternate company as yet named and endorsed by the Asian shareholder group lies in wait once the Aristocrat deals fails. However, it could be that the group sees considerable value in the Playtech enterprise moving forward in whole or divested in small parts, and are subsequently eager to protect their stake. Playtech has seen over the last twelve months their stock value rise by 24% and so is this the best time to sell some investors are thinking.

However, given the scale of the offer, and current marketplace conditions, it seems more covert motivations might be in-play. Playtech and Aristocrat have been conscious to keep their powder relatively dry, but the activity has compelled the Aussie operator to make some cutting comments on the matter. Trevor Croker, the company’s CEO, commented that, we are disappointed that our recommended offer to acquire Playtech plc is expected to lapse.”

Today’s vote would need a 75% majority to push through, but a proxy return has already projected numbers to dip under this threshold. Although the Aristocrat deal may be dead in the water, Playtech may however see a new revised company emerge from the failure of Aristocrat to make an offer for the iGaming software firm.