Aristocrat to Buy Playtech for $3.7 Billion
Aristocrat’s offer values Playtech at 680 pence per share, a premium of roughly 58% to the company’s closing price on Friday, October 15. When the news broke on Monday morning (October 18), shares in Playtech rose as much as 57% to 675 pence.
In order to help fund the acquisition, Aristocrat is set to raise A$1.3 billion in a share sale. The company stock will be sold at an 8.6% discount on Friday’s closing price.
The deal is set to add immediate scale to the Australian company in the world of online gaming, and sports betting, which it estimates was worth $70 billion globally last year. Furthermore, according to Aristocrat, the deal will create one of the biggest business-to-business platform providers in the global gaming industry.
The proposed combination would bring together Aristocrat’s world-class gaming content and customer and regulatory relationships with Playtech’s industry-leading global online RMG platform (B2B) and European B2C footprint. The business will be ideally positioned to unlock sustainable shareholder value by seizing opportunities in the fast-growing global online RMG segment as they continue to open up, particularly in North America. The proposed acquisition continues Aristocrat’s approach of investing in medium to long-term growth, and we are extremely excited by the opportunities that this will bring for our shareholders, people, customers, and players.
Croker went on to explain that the combined company would be able to offer a broad portfolio of end-to-end solutions for global customers “underpinned by a shared focus on responsible gameplay and innovation”.
According to Aristocrat, it has received letters of intent in support of the deal from investors that own about 20.7% of Playtech’s outstanding shares, including its largest owner.