Gopher went public with its $250m (£181.5m/€211m) all-cash offer just over a month after Playtech announced a deal worth up to $210m to sell Finalto to a consortium led by Barinboim Group and backed by Leumi Partners and Menora Mivtachim Insurance.
The counter-offer was submitted on June 29, but Gopher said that, in a written response received today (Friday), the Playtech board stated that “it has limited flexibility to engage with Gopher under the terms of the sale and purchase agreement that it entered into with the [Borinboim] consortium”.
Gopher, which has a stake of just under 5% in Playtech, added: “Gopher believes [it] is an unusual constraint to have allowed given the other protections in place. As such, Gopher urges shareholders to vote against the consortium offer at the General Meeting on 15 July, 2021, in order to give the board the ability to consummate a transaction with Gopher.”
It said that while it does not dispute the proposed disposal of Finalto, it believes the offer accepted by the board does not reflect the division’s growth prospects.
The deal proposed by the Borinboim consortium includes an initial up-front payment of $185m, with $15m of this deferred for up to two years.
A further $25m would be payable contingent on certain cash flow or other criteria being met by the business after the deal completes.
Gopher said that its offer represents a 47% premium on the “base proposal” submitted by the Barinboim-led consortium. This would allow Playtech to “receive proceeds with certainty and in full on completion, securing the clean break which the board has declared as an objective of the transaction”, it explained.
The counter-bid also offers a 35% premium on the guaranteed consideration in the consortium’s proposal and a 19% premium on the maximum amount payable by the consortium.
Gopher would finance its offer from funds that are “immediately available” and would only perform “limited due diligence, anticipated to take no more than three weeks, before seeking to enter into a fully binding offer”, it added.
Playtech in March announced plans to dispose of non-core assets and simplify its business operations, with a strategic focus on its core gambling businesses. This came after seeing a 25.1% year-on-year decline in revenue to €1.08bn in its 2020 financial year.
The supplier had been evaluating its options over the Finalto business – formerly known as TradeTech – for some time, having been approached by a number of interested parties over a potential sale last year. This led to Playtech announcing in August last year that it would be open to selling the business.
In January, Playtech then revealed it was in discussions with the consortium over a possible sale.