TTB Partners drops pursuit of Playtech takeover

Hong Kong-based investment and advisory firm TTB Partners has pulled out of the race to acquire gambling software developer Playtech.

London-listed Playtech’s shares fell 17% on Thursday after TTB Partners has withdrawn from making a potential offer for the company. The group published a statement this morning announcing its intention to pull out, citing challenging underlying market conditions.

TTB Partners approached the British gambling software maker after the Australian slot machine maker Aristocrat’s $2.8 billion offer to acquire Playtech’s business was voted down by shareholders. However, the group was under certain restrictions that prevent it from making a bid for six months after it advised Gopher Investments.

“Challenging global economic and market conditions which were not present in February made it impossible to create the right structure for a new company,” Playtech Chief Executive Mor Weizer and former CEO and current investor Tom Hall said in a joint statement.

Playtech’s former and current CEOs, Tom Halland and Mor Weizer, have teamed up last month with TTB Partners to explore their participation in a new takeover bid by the Asian-based suitor.

Earlier in November, Gopher shelved its $4.0 billion buyout of Playtech. The group’s second-largest shareholder, however, went ahead with its $250 million bid to acquire Finalto unit even after its interest in a bigger deal cooled.

Under UK takeover rules, Gopher Investments, a consortium of Asian and American investors, and its advisors cannot make another bid for the FTSE 250-listed gambling software business for six months unless there is a competing offer. At the time, TTB Partners asked to be released from these restrictions that prevented it from making another offer until 20 May, which Playtech confirmed it granted.

As current and former chief executives gave their public backing to TTB Partners’ takeover, the poker machine maker formed a new independent committee made up of all of its directors except Weizer. Per a regulatory filing, they reviewed matters related to the possible bid from a group of investors from China and Hong Kong, as well as any other potential acquisition offers.

Playtech share price has been on a rollercoaster since October 2021, responding to each twist in the takeover tale.

Aristocrat Leisure was the only bidder in the three-way race for Playtech after JKO Play, a consortium led by former Formula 1 boss Eddie Jordan and gambling industry veteran Keith O’Loughlin, had pulled out.

Jordan told the Financial Times that he was concerned that a group of Asian investors, who recently bought a stake in the London-listed gambling software developer, would block the deal.

After a bumper 2021, several acquisition deals have fallen through this year as investor sentiment soured due to deflation concerns and the ongoing Russia-Ukraine conflict. Just last week, eToro canceled the deal to go public via the SPAC merger with Betsy Cohen-backed blank-check firm.

eToro abandoned its plans even after it lowered its valuation down to $8.8 billion from the earlier planned $10.4 billion, as market conditions changed and SPACs face more headwind.