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(Alliance News) - Playtech PLC on Monday backed a GBP2.1 billion takeover to put the gambling software firm in the hands of Sydney-listed Aristocrat Leisure Ltd.
Aristocrat finally succeeding in swaying Playtech's management, after noting it made numerous approaches earlier this year.
The 680 pence offer from Aristocrat, which manufactures gambling machines and casino management systems and also publishes mobile games, is a 58% premium to Playtech's 429.2p per share closing price on Friday.
The offer values Playtech's equity at GBP2.1 billion. On an enterprise basis, meaning including debt, it values the FTSE 250 company at GBP2.7 billion.
Playtech shares 58% higher at 679.00p early on Monday in London, giving a market capitalisation of GBP2.07 billion.
Sydney-listed Aristocrat has a market value of AUD29.24 billion, about GBP15.75 billion. It is a constituent of the ASX 20 index.
The all-cash bid is "intended to be recommended unanimously by the board of Playtech".
Playtech Chair Brian Mattingley commented: "In recent years, Playtech has successfully repositioned its world-leading gambling technology and operations, expanding in strategically important regulated markets and driving major online B2B revenue growth. Whilst the business has made significant progress, most notably in the Americas, Aristocrat's proposal provides an attractive opportunity for shareholders to accelerate Playtech's longer-term value."
For Aristocrat, the deal offers "material scale" in the fast-growing iGaming and online sports betting spaces.
"This represents an estimated total addressable market of approximately USD70 billion globally," Aristocrat said.
Aristocrat is based in North Ryde, near Sydney. Playtech was founded in Estonia, but now is based in Isle of Man.
Aristocrat noted it made two unsolicited approaches for Playtech back in April. Both were rejected.
"Following a third approach (which, like its earlier approaches, was subject to a number of pre-conditions including Playtech announcing the sale of Finalto), Playtech agreed to provide Aristocrat with access to information about its business. Following a review of the information provided, Aristocrat made a fourth proposal of 680 pence in cash per Playtech Share," Aristocrat added.
Playtech recently has been in a process to "simplify". In late-September, it agreed a deal to sell Finalto, its financial trading division, to investment vehicle and shareholder Gopher Investments for an enterprise value of USD250 million in cash.
Playtech had previously accepted a USD210 million proposal by a consortium led by Barinboim Group and members of the division's management team. This was rejected at a general meeting in August, however, opening the door to Gopher.
Elsewhere, Playtech is eyeing US expansion, making applications for new licenses, while engaging in negotiations with potential partners.
By Eric Cunha; ericcunha@alliancenews.com
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