A consortium called JKO Play, led by former Formula 1 boss Eddie Jordan and gambling industry veteran Keith O’Loughlin, has pulled out of the race to acquire Playtech.
Jordan told the Financial Times that he is concerned that a group of Asian investors, who recently bought a stake in the London-listed gambling software developer, would block the deal.
Earlier this month, it was revealed that JKO Play had made an initial approach to Playtech about a possible takeover deal for 750 pence per share. This had prompted Playtech to postpone its shareholders’ vote on a takeover bid from Australian gambling giant Aristocrat to February 2, instead of January 12.
Per a regulatory filing, the poker machine maker has set January 26 as the deadline for JKO Play to state its intention.
JKO Play was the third suitor within a month to express an interest in buying Playtech, which confirmed that the new bidder had requested access to due diligence information before a possible bid.
But after Gopher Investments walked away and shelved its $4.0 billion buyout of Playtech, JKO consortium was bidding against Australia’s Aristocrat Leisure which was the first to unveil bid for the gambling technology business. The $30 billion ASX-listed company said it would fund the deal with a combination of existing cash and new debt alongside equity raising of nearly $960 million.
Aristocrat says its offer provide full and fair value
In a statement, after JKO’s withdrawal, Aristocrat says its $3.9 billion bid remains the only firm offer on the table for Playtech. It also reminded shareholders that its offer provides “full and fair value with attractive cash certainty.”
Australian slot machine supplier said in a statement: “The Playtech board recommended acquisition remains the only firm offer available to Playtech shareholders, despite the substantial amount of time provided to potential bidders to make alternative proposals. Aristocrat further confirms that the regulatory approvals process remains well on track, and it is committed to completing the acquisition as quickly as possible.”
Under UK takeover rules, JKO Play cannot make another bid for the FTSE 250-listed gambling software business for six months unless there is a competing offer.
There has been frenetic dealmaking in the gambling industry since the US supreme court legalized sports betting as companies look to tap expertise of online gaming software suppliers operating in more developed markets such as the UK.