Aristocrat Leisure Ltd, a slot machine maker from Australia, is making a push to buy Playtech plc, an online casino game maker (similar to Slotsrank.com), who are also a platform provider. They have bid a massive £2.7B (around $3.7B US or AUS$5B). This equates to a 58% premium on the price the market last closed at.
The board have recommended that its shareholders vote in favor of the offer, which lands at 680p per share. When the markets closed on Friday, October 15th, the price currently stood at 429p per share. The directors who have shares themselves are putting their money where their mouth is, as they have voted conclusively in favor of the offer.
Funding of the bid is likely not to be a problem, as this is proposed to be provided by an £864 million equity raising, existing cash resources and new debt. Aristocrat is leveraging the company to boost its own revenue and reach a wider range of customers.
Playtech's most recent published trading results show that their Snaitech division has seen a tremendous 95% growth to €123.4 million in Italy. As this division will be a part of the acquisition, Aristocrat looks to be onto a winner with the takeover.
Aristocrat CEO Trevor Croker has been quoted as saying that the combination of the high-quality gaming content and the customer service and regulatory relations that they bring to the table, along with the RMG Platform that Playtech has to offer, not to mention their European solid B2C footprint would create something that would provide their gaming customers with a comprehensive portfolio of complete solutions.
Both companies also have a mutual focus on innovation and responsible gameplay. Growing fast in North America is also on the agenda. This means that the business will be able to increase in value sustainably.
The joint strengths of these companies mean they will be creating an industry leader that will be a force to be reckoned with on a global scale.
It is not just Aristocrat who feel that this is a positive move; however, with Brian Mattingley, Chairman of Playtech, also commented that it is not just Aristocrat who feel that this is a positive move however, with Brian Mattingley, Chairman of Playtech, who has been noted as saying that over the past few years Playtech has managed to position themselves as a world leader particularly with their progress in the Americas.
He also claimed that Aristocrat's proposal would help boost Playtech's value in the longer term.
While the takeover sounds excellent and looks promising, it isn't a done deal just now. It is still dependant on approval needed from Playtech's shareholders, of which more than 75% need to be in support before it can be moved forward. The proposal for the purchase will be reviewed at the next company Court meeting and General Meeting.
If and when the takeover goes ahead, people are sure to be hearing much more about the company as they are likely to become growing household names, particularly with gamers and sports bettors.