Media reports suggest that the £3-billion bidding war for Playtech is likely to escalate during some talks involving a company backed by the US-based Spanish language broadcaster Univision and a former boss of a Formula One Team.
As revealed by Sky News, Caliente Interactive, an online gambling company that mostly targets Mexican customers, is in advanced talks regarding a merger deal with the US-based special purpose acquisition company (SPAC) Tekkorp Digital. Rumour has it that the merger will be worth approximately $2.5 billion. Under the plans to finance the merger, Univision and its shareholders are set to gather a total of $250 million in private investment in public entity (PIPE), with a further $190 million provided by other institutional investors.
The deal with the special purpose acquisition company is considered an important one because the British gambling software provider Playtech currently owns about 50% of Caliente Interactive through a joint venture.
According to reports, Caliente Interactive was expected to take over Playtech’s right to acquire 49% in its parent company Caliplay. If this turns out to be true, it is expected to trigger a payment to the gambling software provider’s shareholder. However, the payment in question will be accelerated as part of Eddie Jordan’s takeover bid for Playtech through the establishment of a contingent value right (CVR).
Playtech Already Accepted Aristocrat Leisure’s Acquisition Bid
According to people with knowledge of the matter who were cited by Sky News, Mr Jordan and his partners from JKO Play were almost ready with their takeover bid for the British gambling software provider, hoping that the company’s board would recommend it to the shareholders. The offer will probably estimate Playtech at about 750p a share.
The former Formula One team owner’s takeover bid is set to be structured in cash or would include a partial share alternative in order to provide the current Playtech investors to keep their ownership of the company. As reported by Sky News, the people familiar with the matter said that a formal bid could be placed by JKO Play and its financing partners in a few days.
Playtech’s debt is worth about £600 million, so an acquisition offer of about 750p-a-share would value the company at approximately £3 billion.
Currently, Playtech has a market capitalisation of over £2.2 billion. The gambling software provider’s shares are trading above the 680p-a-share takeover offer of Aristocrat Leisure that it had already accepted. Under the acquisition bid of the Australian gambling operator, several irrevocable undertakings that Aristocrat Leisure has secured from the British gambling software provider’s shareholders would become invalid should another suitor offer a price that is at least 10% higher than its bid. This means that Mr Jordan would have to place an offer of no less than 748p-a-share if he wants to secure a board recommendation.
According to sources from the gambling industry, Aristocrat Leisure could consider its options, including one making a higher acquisition offer for Playtech, once a formal takeover bid is made by Mr Jordan and JKO Play. Furthermore, the offer made by Aristocrat Leisure for Playtech is conditional, as it requires the approval of the gambling software developer’s shareholders for the sale of the company’s financial trading arm, Finalto, to Gopher Investments, which has already happened.
- Author
Olivia Cole
