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Playtech’s £2.7 billion Aristocrat sale hits snag as Eddie Jordan given more time for counter

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Eddie Jordan in his Formula 1 days (Getty Images)
Eddie Jordan in his Formula 1 days (Getty Images)

Playtech’s £2.7 billion sale to Australian slot machine giant Aristocrat is hanging in the balance after the London-listed gambling business moved to delay a shareholder vote on the deal.

Playtech, which makes software for gambling companies, said it was pushing back shareholder approval of the Aristocrat deal. A vote was originally slated for 12 January but will now be held on 2 February.

The board has pushed back the deadline to give more time for a possible counter bid from a consortium led by Formula One tycoon Eddie Jordan. Jordan and gambling industry veteran Keith O’Loughlin began running to rule over Playtech in November and have asked for more time to work on a potential offer. The pair now have until the 26 January to make a firm offer or walk away. Playtech said talks were “progressing”.

The update will fuel speculation that a bid gazumping Aristocrat is imminent. Peel Hunt analyst Ivor Jones said the delay suggested there was “sufficient substance to the potential offer from JKO,” the consortium led by Jordan and O’Loughlin.

Aristocrat made a 680p a share bid for Playtech in October but shares have traded well above that level since then as investors bet that a bidding war will force the price higher. Playtech’s stock dipped 3.5p to 728p this morning.

Aristocrat said today its bid “remains the only firm offer” and “provides attractive value in cash and enhanced regulatory and financial certainty for Playtech shareholders.”

JKO “have already had a substantial amount of time to make an alternative proposal for Playtech,” Aristocrat said. “The decision to further delay the relevant shareholder meetings extends the period of uncertainty for all Playtech stakeholders.”

A potential counter bid has been complicated by deal talks in the US involving a company Playtech is invested in. Playtech effectively owns 49% of Mexico’s Caliente Interactive, which is reportedly in talks to list on the Nasdaq in a SPAC deal. Figuring out how to structure a deal to reflect this potential upside is complex.

In the absence of a firm counter offer, the board of Playtech today said they “continue to recommend unanimously that Playtech shareholders vote in favour of the Aristocrat offer.”

If a higher bid does emerge, it is unclear whether Aristocrat would look to counter it. The company hasn’t sweetened its deal as yet despite shares remaining persistently above its offer price.

Aristocrat traces its roots back to the 1950s when it began life as a manufacturer of slot machines. The company still makes them — many bound for Las Vegas — but over the last decade it has transformed itself into an online gambling business through a series of deals.

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