Playtech has become the latest gambling company listed in London with a takeover target in an interesting turn of events. At the same time, operators rush to build scale and launch into the US market.
The Australian gambling group Aristocrat unveiled a $5 billion (£2.7 billion) bid for the gaming giant Playtech, propelling the company’s shares to surge 60% in an instant. Aristocrat has offered Playtech’s investors 680 pence a share, representing a 58% premium to the last closing price on Friday. Moreover, the Playtech board has backed the offer as shares rose from 279 pence to 679 pence.
Not long before, in April, the Australian giant made an unsolicited approach for Playtech, and actually, this is Aristocrat’s fourth bid for the company, but the first one to be made public.
Many gambling companies are rushing to exploit the de-regulating market in the United States. The USA is predicted to be one of the world’s biggest gambling markets.
CEO of Aristocrat Trevor Croker said that this deal would help unlock sustainable shareholder value by exploiting opportunities in the fast-growing global online RMG (real-money gaming) market as they continue to open up, particularly in North America.
Aristocrat is one of the most famous names in the casino industry, starting its business in the 1950s producing slot machines. It’s still up-and-running, with Las Vegas casinos being its primary market, but it has done well in the online gambling sphere over the last few decades, as well.
Aristocrat is also listed on Australia’s stock exchange with a $30 billion market cap, employing 6,500 people in 80 countries. Half of its revenue comes from selling gaming and betting technology and content.
On the other hand, Playtech was founded in 1999, and it has created a robust consumer-facing business over the years producing white label gambling tech. Brian Mattingley, Playtech’s chair, commented on Aristocrat and its attractive offer that might boost Playtech’s longer-term value. Mor Weizer, Playtech’s CEO, said that this deal might enhance its distribution, strengthen its technological capabilities, and build deeper connections with partners.
Investors who hold a bit over 20% of Playtech’s stock have already supported Aristocrat’s bid. Sources also say that shareholders will likely approve the sale.
Playtech’s shares hit an all-time high in 2017 with 959 pence per share. However, the company has struggled with profits ever since, especially in the COVID-19 era.
Aside from producing online casino technology, the company also creates technology for financial trading.
The Playtech takeover is the latest in a string of gambling deals on the London market. Not long ago, Caesars Entertainment took over the UK bookmaker William Hill. Also, DraftKings and MGM have tried to get their hands on Entain.