Ahead of the Playtech General Meeting on July 15, the landmark acquisition deal of Finalto is facing a massive roadblock. Gopher Investments, which is an affiliate of TT Bond Partners (TTB), made an offer of $250 million, however, not much of the details about the fund are available in the public domain, and much remains unknown.
The fund is believed to have been formed just a few days ago and has no public presence. It does not even maintain a website, and the domain gopher-investments.com was registered on June 25, 2021.
Interestingly, Gopher acquired some Playtech shares, but it is only holding 4.97 percent of the company which is just under the all-important 5 percent stake needed to disclose extensive shareholder information to regulators.
Finance Magnates sent some questionnaires to the PR company representing Gopher to know about its source of funds or its intentions behind bringing a deal at such a late hour.
However, the answers we received were not specific to any of our questions. The company did not respond to the second set of questions sent by us in order to clarify gaps in our knowledge, as of press time.
“TTB has significant experience in investing in assets in the technology-driven financial services sector,” the PR company replied, but it did not furnish any details on Gopher.
According to the TTB website, the three partners of TTB are Jonathan Bond, Teresa Teague and Chris Scoular. Teague is a former partner at Goldman Sachs, while Scoular spent years at CLSA and RBS, as seen on their Linkedin. None of them replied to Finance Magnates’ questionnaires, as of press time.
Though Gopher’s $250 million deal sounds more lucrative than what Playtech agreed with the consortium led by Barinboim Group, the private equity and venture capital firm founded in 1961, the timing of the offer is interesting, to say the least. The Finalto divestment has been almost two years in the making, so why the bid now less than 2 weeks before the final date?
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Playtech was looking for a Finalto buyer for a while, which the company also publicly confirmed last August. After months of negotiation, the London-listed company entered into an agreement with the so-called consortium at the end of May.
Playtech Cannot Enter into Another Deal Quickly
Despite the potentially better offer of Gopher, the management of Playtech cannot just walk out of its contract with the consortium.
Gopher has issued multiple press releases publicly urging Playtech shareholders to vote against the consortium’s offer in the upcoming General Meeting. However, the consortium raised some strong reservations concerning the gopher bid.
As the consortium pointed out, that in case its deal falls apart due to shareholders’ disagreement, Playtech needs to pay it “a consideration of $8.8m in the event that a sale transaction is entered into with a third party within the 12 months after termination of the SPA at a value in excess of $200m.”
Additionally, it will take months for Playtech to seal another deal for Finalto even though Gopher wants a closure under the same terms offered to the consortium.
“It seems quite certain that another lengthy sale process will likely have a highly destabilizing and damaging impact on the Finalto business and its workforce, which has already been subject to very aggressive market speculation and whose performance is already under considerable pressure due to factors beyond Finalto’s control,” the consortium added.
“Stick with the Relative Certainty Provided by the Consortium”
The unknown quantity factor of Gopher is not for everyone. UK investment banking specialist Peel Hunt is also recommending Playtech shareholders in favour of the consortium’s deal. “Given the length of time Playtech took to find a buyer for Finalto, we believe the board is right to stick with the relative certainty provided by the consortium,” Peel Hunt stated.
As voting begins and the light upon the Gopher bid shines brighter, the battle for Finalto is far from over.