Playtech announced today the £2.1 billion ($2.85 billion) bid Australian slot manufacturer Aristocrat tabled in October last year failed to gather the required shareholder approval and has been terminated while the proposed acquisition scheme will now lapse.
Vote Failed to Pass Threshold
The majority of Playtech shareholders voted in favor of the proposal at the meeting Wednesday but the vote could not pass the required threshold of 75% to receive approval. The writing was on the wall even before the shareholder meeting when Playtech received the proxy vote.
“Earlier today, Playtech Plc convened the Court Meeting and General Meeting in connection with the recommended cash offer made by Bidco (a wholly-owned subsidiary of Aristocrat,” wrote the technology firm in a statement.
“The total votes in favour of the resolutions were 56.13% at the Court Meeting and 54.68% at the General Meeting, which were below the minimum threshold (75% of those shares voted) needed to approve the resolutions. Accordingly, the acquisition of Playtech by Bidco has been terminated and the Scheme has lapsed.”
The result did not come as a surprise for Aristocrat which also released a statement today based on the results of the voting by proxy. The slot manufacturer noted that the majority of the proxy votes favored the bid, but the deal was blocked by some investors who did not have a meaningful engagement in the process.
“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.”
Trevor Croker, CEO, Aristocrat
Bumpy Road All the Way
It was never smooth sailing for Aristocrat from the moment the company had expressed its firm interest to acquire Playtech as it had to deal with heavy speculation regarding counterbids: first, from Playtech’s shareholder Gopher Investments and then, from JKO Group, a consortium led by former F1 team owner Eddie Jordan.
In the meantime, heavy Asian clouds gathered above the deal as Aristocrat reported unusual interest in Playtech stock coming from the Far East with some of the stock acquisitions taking place at a price much higher than the proposed by Aristocrat 680 pence-per-share.
Aristocrat and Playtech asked the Panel on Takeovers and Mergers in the UK to decide whether those investors among which the owner of Birmingham City FC and wealthy Chinese heiress Karen Lo were not acting as a concert party, building a blocking stake to stop the deal.
Following the collapse of Aristocrat’s bid, Playtech announced it would be considering other options to maximize shareholder value, including breaking up its B2B and B2C businesses to find new buyers.