Barinboim Group “welcomes” Playtech shareholder vote delay on Finalto sale

The subtle war of words (and press releases) is continuing in the not-so-subtle fight between competing bidding groups for Playtech’s financials division, Finalto.

After Playtech announced on Friday that it was going to postpone its shareholder vote on the previously agreed-upon sale of Finalto to an investor group led by Zvika Barinboim, the Barinboim group has issued a new press release (see full text below) indicating that it “welcomes” the Playtech move.

Playtech’s delay of its shareholder vote to approve the $101 million sale of Finalto (which includes the Markets.com Retail FX business) to Barinboim’s consortium came about after a late competing bid emerged for Finalto from an entity called Gopher Investments. Gopher is effectively an investment vehicle for Hong Kong based investment firm TT Bond Partners.

The Barinboim press release argued that the postponement will give Playtech shareholders time to properly scrutinize the competing bid which, although higher than Barinboim’s agreed-upon price, is non-binding and subject to scrutiny by regulators.

The Barinboim Group press release reads as follows:


THE CONSORTIUM WELCOMES PLAYTECH’S POSTPONEMENT OF GENERAL MEETING ENABLING SHAREHOLDERS TO SCRUITINISE VALIDITY OF GOPHER’S INTEREST IN FINALTO  

Finalto S.P.V. Ltd, the consortium led by Barinboim Group and backed by Leumi Partners Limited and Menora Mivtachim Group, together with key members of the Finalto Business’ management team (together the “Consortium”), welcomes the announcement issued today by Playtech plc (“Playtech”) confirming that the General Meeting due to be held on 15th July 2021 will be subject to a two-week adjournment. Playtech will hold an adjourned general meeting to vote on the binding agreement (the “SPA”) between Playtech and the Consortium regarding the disposal of Finalto Group (“Finalto”) on 29 July 2021.

The Consortium recognises Playtech’s fiduciary duty to its shareholders and is pleased that Playtech and its shareholders will now have the opportunity to scrutinise the recent indicative non-binding interest for Finalto from Gopher Investments (“Gopher”).

Since Gopher announced its indicative non-binding interest on 2nd July 2021, it has revealed very little information on itself, the source of its funds and its ultimate controlling parties, all of which will be heavily scrutinised by regulators. To the best of the Consortium’s knowledge, Gopher has failed to properly answer even basic questions on these matters, which should be of great concern.

As announced previously, both Playtech and the Consortium are bound by the restrictions agreed as part of the SPA, which includes not engaging in negotiations with any third party regarding a potential transaction involving the sale of Finalto, as is customary for transactions of this nature. For the avoidance of doubt, the adjournment of the General Meeting does not change these restrictions, but the Consortium confirms that it has given Playtech a limited release to ascertain the crucial KYC and related information it requires.

The Consortium hopes that Gopher will use the extension period to now be more forthcoming and provide sufficient information so Playtech and its shareholders can properly assess the ability of Gopher to pass the intense regulatory scrutiny it will be subject to, removing considerable uncertainty for shareholders. Since Gopher’s announcement from 2nd July 2021, Playtech’s share price has underperformed.

Should it be revealed by Gopher that any of its ultimate controlling parties are indeed linked to China, any acquisition is likely to raise material regulatory concerns and will be subject to even closer scrutiny.

The sale process of Finalto was initiated in 2019 and, in Playtech’s words, it has been an “elongated and thorough process”, and the Consortium was selected taking into account not just the price, but also its “ability to complete the transaction (particularly in light of the Finalto Business’ regulated status in multiple global jurisdictions).”

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