Playtech resets Finalto sale shareholder vote, calling competing offer “uncertain”

After canceling a required shareholder vote in mid July to approve the sale of its Financials division Finalto, online gaming tech provider Playtech (LON:PTEC) has now announced that it has reset the vote for August 18.

Playtech canceled the vote on the agreed-upon sale of Finalto – which includes Playtech’s forex/CFDs B2B business alongside the Markets.com retail FX brokerage operation – to a consortium led by Israeli businessman Zvika Barinboim after a last-minute competing (and supposedly higher) all-cash offer emerged from Hong Kong based TT Bond Partners, via its Gopher Investments arm.

The Barinboim offer was for $210 million (which we explained is really just $101 million, as Playtech is kicking in $109 million of cash into the deal), while the TT Bond Partners offer is for $250 million.

Playtech’s signed deal with Barinboim includes an approximately $9 million breakup fee, plus it precludes Playtech from either shopping the offer or negotiating with other potential competing bidders. That agreement made it tricky for Playtech as far as “evaluating” the TT Bond Partners offer.

In a new Supplementary Circular issued by Playtech, the company disclosed that the Barinboim consortium granted permission for the company to raise a limited set of clarificatory questions with Gopher Investments and its backers. Those questions were focused on determining the ultimate ownership and funding structure of the Gopher offer, as well as the source of funds and the bidder’s ability to obtain the required regulatory clearances – as the acquired businesses are licensed financial concerns in a number of jurisdictions.

Playtech said that Gopher provided some initial responses to those questions and, again with the consortium’s consent, Playtech sent some further questions to request additional clarity. Over the last three weeks, Playtech and Gopher have had dialogue on the basis upon which Gopher would be prepared to provide this additional information – but, Playtech said, it has not received responses to these additional questions. This means that Playtech has not yet been able to achieve the necessary clarity on Gopher’s ultimate ownership and funding structure, source of funds or ability to obtain the required regulatory clearances.

The proposal received from Gopher is therefore uncertain, according to Playtech, in terms of its deliverability, principally because it is not binding in nature and remains subject to a number of conditions. Accordingly, Playtech stated that its board is currently not in a position to change its recommendation to shareholders – i.e. that they vote in favor of the original deal with Barinboim – as set out in the original Circular issued earlier this summer.

Playtech added a subtle warning for shareholders thinking of rejecting the Barinboim offer in favor of the admittedly higher Gopher bid, by saying that if shareholders do not approve the deal, there can be no certainty that any disposal of Finalto would ultimately occur, or on the terms upon which it might occur. And, in any event, there may be a significant delay in the timing of any Finalto disposal. Sort of a bird-in-the-hand versus two-in-the-bush argument.

The full Playtech Supplementary Circular setting the new August 18 vote date can be accessed here (pdf).