(Alliance News) -Â Playtech PLC on Friday said it has decided to adjourn next week's general meeting over the sale of its Finalto unit to allow the board and shareholders more time to "consider recent developments".
Over the past week, a tussle over Playtech's financial trading division, Finalto, has developed after investee Gopher Investments came forward with an improved takeover offer.
In late May, Playtech unveiled plans to sell Finalto for up to USD210 million. The sale is being made to a consortium led by Barinboim Group and backed by Leumi Partners and Menora Mivtachim Insurance, together with "key members" of the division's management team.
Under the consortium deal, Finalto is being sold for a fixed amount of USD185 million, of which USD15 million is deferred for up to two years from completion. A further USD25 million is contingent on the business meeting certain targets.
However, Gopher - which holds just under a 5% stake in Playtech - emerged last week with a USD250 million offer.
A general meeting to vote on the deal had been scheduled for next Thursday, but Playtech on Friday tabled a two-week adjournment. The meeting will now be held on July 29 to vote on the consortium deal.
"As announced previously, both Playtech and the consortium are bound by the restrictions agreed as part of the SPA, which includes not engaging in negotiations with any third party regarding a potential transaction involving the sale of Finalto, as is customary for transactions of this nature. For the avoidance of doubt, the adjournment of the general meeting does not change these restrictions," said Playtech.
Gopher last week said it presented its offer to the Playtech board, but received a written response saying the company has "limited flexibility" to engage with Gopher under the terms of the sale and purchase agreement that it entered into with the consortium in May.
Responding on Tuesday, Gopher said it has reviewed the agreement in place for the consortium's offer and envisages entering into a pact on "materially equivalent" terms. Gopher urged the Playtech board to adjourn the general meeting originally scheduled for next Thursday.
However, the consortium on Wednesday appealed to shareholders to back its deal at the general meeting - and warned that not voting for the deal risks "destabilising" Finalto.
The consortium said: "Contrary to what was implied in Gopher Investments' statement, shareholders should understand that due to certain binding terms of the SPA, Playtech is unable to engage with any alternative bidders straight away, even if the shareholders vote against the consortium's bid. Moreover, any subsequent sale process will take many months to conclude, during which time Finalto will be – yet again – subject to considerable uncertainty. By the consortium's conservative estimation, another bidding process will not be concluded until late 2022 at the earliest."
The consortium said the current deal on the table represents value for shareholders and urged them to back the transaction.
Gopher on Friday returned to the table with the promise of a USD10 million break free as it tried to sweeten its offer for Finalto.
"This break fee provides greater certainty to the board and to shareholders that Gopher will be able to enter into and complete an acquisition of Finalto," Gopher said.
Gopher noted this is above the USD8.8 million break fee payable by Playtech to the consortium if Playtech decides to sell Finalto to Gopher.
"This reflects Gopher's confidence in its ability to complete the transaction on the terms outlined in that announcement," it said, adding that the break fee is subject to the Playtech board agreeing to change is current recommendation to support Gopher's offer.
If the general meeting next week goes ahead, Gopher said before Playtech decided to postpone the meeting, it reiterated its appeal to shareholders to vote down the consortium offer.
"Gopher is the second largest shareholder in Playtech, with approximately USD100 million of capital invested, and is therefore fully aligned with all other shareholders in supporting the board to deliver maximum value for all shareholders," it added.
Shares in Playtech were up 0.2% at 414.40 pence in London on Friday.
By Lucy Heming;Â lucyheming@alliancenews.com
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