Playtech will not go ahead with its plan to publicly list Caliplay, the company’s joint venture with Mexico-based operator Caliente Interactive, due to the rising cost of capital.  

The deal is the latest victim of a worsening capital market environment that has already caused Hong Kong-based TTB Partner to pull out of the planned acquisition of the UK gambling software supplier earlier in July.

Playtech owns a 39% stake in Caliplay and had explored a transaction which would have seen the business acquired by a US-listed special purpose acquisition company (SPAC) – Tekkorp Digital Acquisition Corp – in order to penetrate the US market and target Latin American clients in the US.

However on Friday (29 July), Playtech said it would no longer pursue the deal in the envisioned format.

“Market conditions have deteriorated significantly since the transaction was initially contemplated and, accordingly, this transaction is no longer being pursued in the same manner,” the company said.

The London-listed supplier said it is now looking into plan B and continues to explore alternative opportunities with Caliplay, to build a standalone US business under the Caliente brand focused on the Hispanic community in the US.

Both Playtech and Caliplay are still in discussions with the SPAC about this alternative opportunity, but talks are at an early stage.

Playtech: “Market conditions have deteriorated significantly since the transaction was initially contemplated and, accordingly, this transaction is no longer being pursued in the same manner.”

Investors are closely watching developments at Playtech after the TTB acquisition fiasco, which was followed by a report that Eddie Jordan’s JKO Play might renew its interest in purchasing Playtech.

Despite its acquisition troubles, Playtech said “it is trading ahead of expectations” highlighting its robust B2B performance which was partially “driven by very strong momentum from the Americas including Caliente and other structured agreements in addition to a strong performance across the wider B2B operations”.

Meanwhile, Playtech’s consumer-facing business Snaitech has seen “excellent results driven by its online business, retail recovery and favourable sports results”.

The company’s board said that “this momentum across the business” gives it “great confidence” in the prospects for FY 2022 and beyond.

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