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Playtech signs new strategic partnership with NorthStar Gaming in Canada
Deadline for JKO bid is 5pm. 22nd january
The elusive partner for Eddie Jordan is Vikrant Bhargava who is a billionaire. So let's hope the funding is there for an increased bid of approx. 3billion by 26th January. And then who knows where this will go.
GLA
Sunday Times ... The co-founder of party gaming is now backing the bid from JKO financially, so it can now progress..
Just been browsing as i have to much time on my hands, and noticed a guy called Harald Mcpike Zama has just cashed out on Playtech and sold 3,120,183 shares. Look him up, what a fascinating man. He's been there , done it and worn out the t shirt. If ever a man had a bucket list , he has.
cannot see HK crew getting involved just for cash profit. They are all mega wealthy. Karen Lo is a multi billionaire. She wouldn't get out of bed for the cash premium involved. Think of all the behind the scene logistics involved in synching everybody together, all the purchases of stock, the expenses involved, the time they will have spent planning every move. They want all or to make sure they get parts that interest them. They will pull all the strings or they will block the bid if anybody does not play ball These are real gamblers .
Thinking aloud :
HK crew have largely bought in at up to 750p and are likely to expect a decent premium to support any bid. If they have the magic 25% or close to it, then they could scupper any bid, perhaps Aristocrats need some extra weeks to sort out the necessary funding for an increased bid..... ?
From my reading of the RNS the extension was granted after Playtec pushed back til Feb shareholder's meeting not JKO
I suspect the shareholder meeting pushback might have something to do with trying to get a handle on what folks in HK are up to, so perhaps Aristocrats instigated ?
On 5 January 2022, Playtech announced that the shareholder meetings to
approve the offer for Playtech by Aristocrat will be adjourned to 2 February
2022.
In the light of this, the Executive has ruled that, unless the Executive
consents otherwise, JKO must now by 5.00 pm on 26 January 2022,
From RNS: "Playtech and JKO Play Limited ("JKO") have requested the Panel set a revised deadline /from 12th of Jan to 2nd of Feb/, aligned to this new date for the Shareholder Meetings, by which JKO must clarify its intentions in relation to Playtech."
Let´s review the facts:
* Aristocrats have made an offer of 6.8 GBP per share, which translates to 2.7B GBP market cap.
* Asian guys have purchased 10-20% stake. Their intentions are not clear.
* Share price is constantly in range of 7.25-7.4 GBP, considerably higher than Aristocrat offer. So someone is constantly buying.
* Divesting value (if all goes well) of Playtech is approx. 2bn EUR for Snai, 1bn EUR for Caliente, + US business (more potential value and less current value) + the rest of business. (more current value and less potential value). I would say that in total it is definitely worth twice as much as Aristocrats has offered.
Why does JKO want extra month?
Buy more shares? Find financing for the deal? Wait for progress with sales of Caliente? Or really just progress with the due diligence (which I hardly believe)?
Nice read. Clearly Playtech is ubiquitous and as such should be rated accordingly. As on one of my posts mentioned LSEG which fought off four attempted takeovers and still remains independent. That was considered ubiquitous and four different parties tried to buy it. The point i'm making is the first attempt was at £20, then up to£60. The current price sits at £68 having once nearly reaching £100. The parties now fighting for it must be aware of this as this is the last catch..
Playtech states Total B2B opportunity.
Page 19 has the details of Playtechs possible USA market. http://www.investors.playtech.com/~/media/Files/P/Playtech-IR/results-reports-webcasts/2021/h1-2021-results-presentation-vfinal-2.pdf. Playtech makes 27% EBITDA margins on all revenue. Playtech believes there is a future opportunity of USA revenue of 3bn and if Playtech only makes half of the EBITDA margins of 27% i.e 13.5% its USA EBITDA would be 405m. 405m at 7.5 times could put a value of 3bn, 9.92p a share, on the USA side alone. This is all guesswork but Playtech has great properties and services that are needed in the USA and can be rapidly expanded. As someone said in the past "I like the stock"
Page 19 has the details of Playtechs possible USA market. http://www.investors.playtech.com/~/media/Files/P/Playtech-IR/results-reports-webcasts/2021/h1-2021-results-presentation-vfinal-2.pdf. Playtech makes 27% EBITDA margins on all revenue. Playtech believes its possible future USA revenue will be 3bn and if Playtech only make half of the EBITDA margins of 27% i.e 13.5% its USA EBITDA would be 405m. 405m at 7.5 times could put a value of 3bn, 9.92p a share, on the USA side alone. This is all guesswork but Playtech has great properties and services that are needed in the USA and can be rapidly expanded. As someone said in the past "I like the stock"
Today playtech has launched two new state of the art live casino facilities in Michigan and New Jersey, a new standard in live casino experience.
Excellent analysis. Thank you. Big call to make to reject a bid with a 64% premium as at now. That said, i remember saying that when a bid of £20 p share was rejected for LSEG! 3 further bids were rejected also. Making me think about it.
I valued the whole Playtech business at EBITDA at 7.5 times. Its EBITDA was 300m in 2020. Pre Pandemic 2019 Playtech EBITDA was 383m. At this 2019 EBITDA at 7.5 times, would value Playtech at 9.38p. 2021 half-year Net Debt is 677m 2.20p per share. Enterprise value including debt would be 7.18p + debt 2.20p = 9.38p. If we take the debt off, it will value the shares at a minimum of 7.20p. I'm voting against the bid as Xlmedia plc report said the illegal online gambling market in the USA is worth over 100bn. Over the next 5 to 10 years, a lot of this will become part of the legal transformation of online gambling in the USA. Playtech said in a report that Legal online gambling and services in The USA are going to be 39bn in 1 or 3 years. Playtech management hopes to capture 3bn of these sales in the USA. This could generate an extra EBITDA of 300m to 500m for Playtech.
Thanks! Are you valuing the whole of Playtech or extracting the value of Snaitech within the company which is the comparable sum of parts relating to Flutter's purchase. From what i've read Snaitech is the no. 1 player in Italy. Just thinking that all the parties are looking at the breakup value of the business and realising that £9 to£10 p.share is realistic.
Flutter paid around 7.5 EBITDA for Sisal. If Playtech's EBITDA was bought for this price it would value the Playtech shares at 7.45p.
Does Flutter's purchase of Sisal at 1.6B make playtech's sum of parts higher or lower? Anybody got any info.?
I am thinking sum of the parts carve up coming that will fuel the takeover sp I.e. Jordan bid with carveouts of Finalto (Gopher) , Caliente (SPAC) and imagine the HK folk want the unregulated Asia Market for thir stake ( to block they need to own 25% as I understand it).
Interesting weeks ahead
Guess Aristocrats can see this slipping away unless they up their offer quickly !!!
Keep an eye over Xmas !!
Check out sky news website. Aristocrat have asked the takeover panel to investigate the Hong Kong cartel stake.building. They think they have over 20% of the shares between them and can block any bid for Playtech. They think they might want to extract the unregulated Asian market for themselves. Aristocrat are bottling it.
Does explain why our HK friends were happy to buy at 750p
Divestment of Caliente and Finalto could generate a $1.25bn liquidity event which heavily cushions the top line investment number being quoted of $3 bn or $2.4 bn net of debt
Well, Mr. Market does not seem to agree with my arguments. A few things can go wrong with what I wrote:
1. Caliente 2.5B deal may fail. If it would be finalized, we would have an RNS from PTEC mgmt.
2. Current PTEC bidders might have had insider information about the deal before yesterday and it is already included it in the price.
3. The Caliente deal is not finalized before the PTEC deal gets done.
Does explain why our HK friends were happy to buy at 750p
Divestment of Caliente and Finalto could generate a $1.25bn liquidity event
Excellent post .We all know what you spent the night doing . Suppose your sleepless night wasn't wasted ! If your invested here you'll have some restful sleep coming. haha.
Fair value of Caliente 49% option is 338.5M USD in the 2021 half-year report
https://playtech-ir.production.investis.com/~/media/Files/P/Playtech-IR/results-reports-webcasts/2021/2021-half-year-results-report.pdf
The actual value of the Caliente option is 2.5Bx49%=1.225B USD
Which is an extra gain of 1225-338.5= 886.5M USD, equal to 670M GBP
Playtech has roughly 300M shares.
Thus, I would expect 670/300= 2.23 GBP premium per share compared to the current offering.
So, correct me if I am wrong, but for Aristocrats, the new expected offer price could (should?) be 6.8+2.23= 9.03 GBP
For Eddie Jordan it is 7.5+2.23=9.73 GBP
For me the whole story raises a big question about the accuracy of evaluation of other options on the Playtech balance. sheet.