Playtech Plc Shareholders Set to Vote Against £2.1 Billion Australian Takeover

(Bloomberg) --

Playtech Plc shareholders are set to vote against the 2.1 billion-pound ($2.8 billion) takeover bid for the British provider of gambling software.

At least 75% of shareholders voting at the meeting must be in favor for it to go through. In a statement Wednesday, Playtech said the threshold for the deal will not be met at a company meeting this afternoon, and it is currently considering alternative deal options.

Australian slot machine maker Aristocrat Leisure Ltd. made a cash offer of 680 pence per share in October. Playtech shares have held above that price for much of the time since.

Fund manager Abrdn Plc, one of Playtech's top 20 shareholders with a 2.4% stake, has said the Aristocrat offer was fair and it planned to vote in favor. However, Aristocrat had been struggling to communicate with a block of Asia-based investors that together own over 20% of Playtech, Bloomberg reported.

Playtech's shares fell 6% in early trading on Wednesday.

“The emergence of a certain group of shareholders who built a blocking stake while refusing to engage with either ourselves or Playtech materially impacted the prospects for the success of our offer,” said Trevor Croker, Aristocrat's chief executive officer said in a statement.

Read More: Aristocrat to Accelerate Plans for Alternative Scaling Options

After Aristocrat made its approach, Playtech attracted interest from JKO Play, an acquisition vehicle for former Formula One team head Eddie Jordan and gambling executive Keith O'Loughlin's, and Hong Kong-based Gopher Investments, Playtech's second-biggest shareholder, at 4.97% of the company.

The interest around Playtech is part of a global deal frenzy in the gambling market. The activity was kicked off by a 2018 U.S. Supreme Court ruling striking down a law that barred commercial sports betting in most states.

Gopher withdrew its consideration in November. JKO stepped back from Playtech Jan. 21 on concerns investors based in Asia would block the transaction. That pushed Playtech shares below the Aristocrat offer price, where they have remained.

“In the event that the Aristocrat Offer does not proceed, the Board is determined to pursue options to maximize value for all shareholders,” said Brian Mattingley, chairman of Playtech.