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Aristocrat’s online ambitions unchanged with Playtech deal set to fail

| By Daniel O'Boyle
Aristocrat Leisure remains committed to seeking out online growth opportunities, in the wake of the expected collapse of its proposal to acquire Playtech.
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Playtech’s board backed an offer for Aristocrat to acquire the business for £2.7bn (€3.2bn/$3.7bn) in October, subject to shareholder approval.

However Playtech said today (2 February) that proxy votes received to date suggest the acquisition will fall short of the 75% of votes required for Aristocrat’s bid to proceed, though it is anticipated that more votes will be cast in favour of the deal than against.

“We are disappointed that our recommended offer to acquire Playtech plc is expected to lapse. Notwithstanding extensive due diligence on Aristocrat’s part, developments since the announcement of our offer have been highly unusual and largely beyond Aristocrat’s control,” Aristocrat chief executive and managing director Trevor Croker said.

“In particular, the emergence of a certain group of shareholders who built a blocking stake while refusing to engage with either ourselves or Playtech materially impacted the prospects for the success of our offer, which had been recommended by the board of Playtech.”

Instead, Croker said Aristocrat would continue to pursue a “strategic” approach to mergers and acquisitions.

“The long-term interests of our shareholders are the absolute focus of M&A at Aristocrat. We will always take a highly disciplined, strategic approach to our investment choices, consistent with our customer-centric philosophy,” Croker explained. 

“Aristocrat has entered into 2022 with excellent operational momentum, flexibility and resilience with continued strong product-led performance across gaming and pixel united. We look forward to providing further detail to shareholders at our upcoming AGM later this month.”

In particular, the business will continue to pursue opportunities to enter the real-money online gambling space. 

“From a strategic perspective, Aristocrat’s commitment to participate in the online real-money gaming (RMG) segment will not change,” Croker added. “In the future, online RMG capability will be one way we deliver new and connected experiences that leverage our world-leading content, and unlock additional value across Aristocrat’s portfolio while deepening customer engagement.

“Our focus now shifts to accelerating our plans for alternative online RMG scaling options, and continuing to execute our growth strategy, in a way that is consistent with our rigorous investment criteria, high regulatory standards and integrity. We look forward to sharing more details with shareholders as we move forward.”

The Playtech shareholders’ expected decision not to approve the bid comes despite the fact that no rival offer is on the table. JKO Play – a business jointly led by Formula One magnate Eddie Jordan and industry veteran Keith O’Loughlin – had initially entered the race to acquire the business, but pulled out last month, just before Playtech announced that there were still questions about the way its shareholders would vote.

Last week, reports emerged that Playtech would consider breaking up its business if the Aristocrat deal could not be approved. At the time, Playtech did not state whether it was considering a break-up sale if the acquisition were to fail. However, today the board confirmed this, saying that its focus would turn to maximising shareholder value by selling off Playtech’s B2B and B2C businesses, with negotiations ongoing.

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