Aristocrat back in pole position as Eddie Jordan withdraws JKO Play interest in Playtech

JKO Play has pulled out of a bid to buy Playtech, which would appear to make Australian gambling technology provider Aristocrat favourite to acquire the London-listed supplier.

According to the Financial Times, JKO Play – which is headed up by former F1 driver and team boss Eddie Jordan – pulled out of a potential 750p per share offer for Playtech over concerns a group of Asian investors would block the deal.

Aristocrat’s bid of 680p per share (£2.7bn), submitted at the start of December, had already been unanimously recommended for shareholders to accept by the Playtech board.

Interest from JKO saw the UK Takeover Panel extend the deadline for JKO to make a concrete offer for Playtech to 26 January, although it withdrew that interest as of today (21 January).

Playtech acknowledged the withdrawal and is still recommending that shareholders accept the Aristocrat bid in a general meeting on 2 February.

This is despite the fact the offer is below Playtech’s current share price, which has climbed nearly 72% since Aristocrat’s bid was accepted by the board last October due to the competing interest of JKO and Hong Kong-based Gopher Investments, which pulled out of the process in November.

In response to JKO’s retreat, Playtech has urged shareholders to engage with the Aristocrat offer. “The board continues to seek engagement with all of its shareholders regarding the Aristocrat offer,” it said in a statement.

“However, a number of material investors have not to date engaged meaningfully about their views on the Aristocrat offer, including certain investors that have disclosed or taken material positions in the company following the announcement of the Aristocrat offer.

“The absence of customary levels of engagement means that the board is approaching the Court and General Meetings without a clear understanding of whether these shareholders are supportive of the Aristocrat offer.”

JKO is banned from making a new offer for Playtech for the next six months, according to the City Code on Takeovers and Mergers.

Interestingly, the FT reports that JKO intended to sell Playtech’s Italian-facing B2C operation Snaitech to Entain if it was successful in any deal.

Entain, which is already live in Italy via bwin, Eurobet and Gioco Digitale, could be looking to boost market share in the country after rival Flutter acquired Sisal for €1.9bn in December.

London-based investment bank Peel Hunt retained its Hold rating and 680p target price in wake of the news, adding: “The bid process has triggered an intense focus on Playtech’s value and it is clear that there is value to be extracted from Playtech’s interest in Caliente in Mexico and, we believe, from the Italian B2C business.”