Australian shares have experienced an increase following the excitement associated with a number of takeover deals, including the recently announced acquisition of the world’s biggest supplier of online gambling and sports betting software by Aristocrat Leisure.
The All Ordinaries Index increased by one-fifth of a per cent, reaching 7,690.
As announced by Aristocrat Leisure itself, the Sydney-based poker machine manufacturer would take over Playtech, a UK online gambling and sports betting developer, in a deal estimated at £2.1 billion (almost AU$4 billion). The acquisition would allow the Australian gambling company to expand into new growth areas, including real-money gaming (RMG). The board and the largest shareholder of the UK gambling software supplier have backed the acquisition bid.
The deal is set to be funded with an AU$1.3-billion equity raising, alongside existing cash and new debt.
At the time when the announcement was made, the Chief Executive Officer of Aristocrat Leisure, Trevor Croker, explained that the business would be ideally positioned to encourage sustainable shareholder value by taking advantage of the opportunities created n the fast-growing global online real-money gaming market, as such opportunities continue to open up, especially in North America.
Playtech’s Board and Largest Shareholder Give the Nod to Proposed Acquisition Bid
As mentioned above, the shareholders of Playtech, which is listed on the London Stock Exchange, have been offered the price of 680 pence per share, which is a 58.4% premium to the closing price of the UK gambling and sports betting software developer on Friday, October 15th. Both the largest shareholder of the operator, which currently has about 21% in the company and its board have backed the offer made by Aristocrat Leisure.
The Australian poker machine manufacturer has shared expectations that the deal is expected to add to the company’s earnings from the first year after the transaction’s completion.
As Aristocrat Leisure shared earlier today, the acquisition deal would provide it with material scale in the online gambling and sports betting segment, known as online real-money gambling. This market has already been subject to a considerable increase over the past few years. In its statement, the Australian gambling company explained that the RMG represented an estimated total addressable market of about AU$70 billion globally. The online real-money gambling segment has already been subject to rapid growth, particularly in North America.
Playtech, on the other hand, has been the largest online gambling software supplier on a global scale. Currently, the Isle of Man-based company that specialises in designing, developing and distributing online gambling software is regulated in 30 jurisdictions, has 170 global licensees and employs over 7,000 people in 24 countries.
The managing director and CEO of Aristocrat Leisure, Mr Croker, has explained that after the completion of the deal, the combined Group would have a broad portfolio of end-to-end gaming solutions for customers all over the world. Apart from that, the business is set to be ideally positioned to draw a sustainable shareholder value by taking advantage of the opportunities in the RMG segment.
- Author
Olivia Cole
