FNG Exclusive… FNG has learned via regulatory filings that UK investment management firm Schroders has sold down the vast majority of its holdings of online gaming and forex company Playtech (LON:PTEC).
Schroders plc (LON:SDR), via its Schroder Investment Management unit, has been one of Playtech’s largest institutional shareholders, holding 10.8 million shares (about 3.5% of outstanding shares). Alongside some of Playtech’s other large institutional shareholders Boussard & Gavaudan, Setanta, SpringOwl, and Ader, Schroders had provided a letter of intent to vote in favour of the sale of Playtech to Aristocrat Gaming for 680p per share (or a total of £2.1 billion), when that transaction eventually comes up for shareholder approval.
Playtech said at the time that the deal with Aristocrat was announced earlier this month that it had received irrevocable undertakings or letters of intent in respect of a total of 63,412,083 Playtech shares to vote for the deal, representing in aggregate approximately 20.7% of Playtech’s shares.
However with Playtech shares trading at (or even slightly above) that 680p level, and the deal’s closing at best months away as the parties receive necessary regulatory approvals for the change of ownership (officially, a Q2-2022 closing is expected), Schroders decided that it may as well sell now. The only possible upside of continuing to hold would be if Aristocrat was forced to raise its offer, which is unlikely to happen.
In total, in the first 10 days after the sale of Playtech was announced Schroders sold 8.65 million PTEC shares worth about £59 million. Schroders now retains 2.14 million shares, but we believe that they are likely to move those out as well as market conditions allow.
As far as the effect on the overall sale, assuming that the sale does get to the shareholder-approval phase (after regulatory approvals are received) then it is unlikely that the “new” shareholders would vote against the deal, barring some unforeseen circumstances such as a spike in Playtech revenues and profits. Playtech shares were trading at about 492p before the sale was announced, and might move back there if the transaction doesn’t go ahead.
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