Playtech stands firm on Finalto sale recommendation

Playtech has reaffirmed its recommendation that shareholders vote to accept a $210m (£148m) bid for its Finalto financial trading division from a consortium led by Tel Aviv-based private equity firm Barinboim Group. Providing an update on 2 August, the Playtech board said it was not in a position to change its recommendation to shareholders despite receiving a higher bid of $250m from Gopher Investments. Gopher last month put a spanner in the works for Playtech by bidding $40m more for Finalto despite the fact a binding purchase agreement had already been reached with the Barinboim consortium. This sparked pressure from shareholders urging Playtech to reconsider its prior recommendation and to open a dialogue with Gopher Investments in order to consider the superior offer. The binding agreement meant Playtech was not allowed to engage with Gopher, although the Barinboim consortium granted permission for the supplier to ask clarificatory questions of Gopher focused on ownership structure, source of funds and its ability to obtain regulatory clearance. Playtech said Gopher provided some initial responses to the questions but failed to offer clarity in regard to additional questions posed by the business over the last three weeks. “This means Playtech has not yet been able to achieve the necessary clarity on Gopher’s ultimate ownership and funding structure, source of funds or ability to obtain the required regulatory clearances,” said the supplier. “Accordingly, the board is currently not in a position to change its recommendation to shareholders.” Gopher said it was “highly disappointed” in Playtech’s decision and that it does not believe a “full and fair” representation of the interaction between the two parties was published. China-based Gopher argued it responded promptly to the initial questions posed and that Playtech’s additional requests would have required access to “commercially confidential and sensitive” info. The fund alleged it had not heard anything further from Playtech since 26 July. The Barinboim consortium, which will be hoping shareholders side with Playtech’s recommendation, said its offer provides value and certainty and would finally put an end to an arduous 18-month sale process. “Shareholders should ask why Gopher continues to hide and should also be suspicious of Gopher’s credibility, particularly given that disclosure is crucial when buying a highly regulated business,” said the consortium. “Furthermore, the firm associated with Gopher, TT Bond Partners, is a small boutique brokerage that raises money from Chinese investors. “Gopher’s behaviour has not been well received by the market. Since it first announced its interest, Playtech’s share price has fallen by nearly 17%.” The adjourned general meeting to vote on the disposal of the Finalto division will be resumed on 18 August, with most shareholders voting virtually due to the Covid-19 pandemic.