Australian gaming giant Aristocrat Leisure Ltd looks set to abandon plans to acquire online gaming platform provider Playtech plc after what it described as an unusual series of events in the lead-up to a vote by Playtech shareholders this week.
While both Aristocrat and Playtech said a vast majority of shareholders had voted in favor of the takeover bid – first announced by the two companies in October – they had fallen short of the 75% threshold required under Isle of Man law with 56.13% voting in favor.
The main obstacle is said to have been a bloc of Asian shareholders, including AsianLogic founder Tom Hall and International Entertainment Corp Chairman Stanley Choi, among others, who recently acquired a combined 27.7% stake in the company – most of it after news broke of Aristocrat’s takeover plans.
In a filing, Aristocrat said it had taken every possible step to engage with this shareholding bloc without success.
“We are disappointed that our recommended offer to acquire Playtech plc is expected to lapse,” said Aristocrat CEO and Managing Director, Trevor Croker.
“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.
“In particular, the emergence of a certain group of shareholders who built a blocking stake while refusing to engage with either ourselves or Playtech materially impacted the prospects for the success of our offer, which had been recommended by the Board of Playtech plc.”
While Aristocrat had been willing to visit alternate transaction structures to get the Playtech deal across the line, Croker said the company was now ready to move onto greener pastures.
“From a strategic perspective, Aristocrat’s commitment to participate in the online RMG segment will not change,” he said.
“In the future, online RMG capability will be one way we deliver new and connected experiences that leverage our world-leading content and unlock additional value across Aristocrat’s portfolio while deepening customer engagement.
“Our focus now shifts to accelerating our plans for alternative online RMG scaling options and continuing to execute our growth strategy in a way that is consistent with our rigorous investment criteria, high regulatory standards and integrity.”
