Playtech Buys 9.36% of Plus500 Shares as $1.4 Billion Offer Revealed

Playtech defies reluctant shareholders by setting the stage for an aggressive takeover

Playtech (LSE:PTEC) announced that following its market purchases this morning, the Playtech group has a total holding of 10,756,067 ordinary shares in Plus500 (AIM:PLUS), representing 9.36% of Plus500’s issued ordinary share capital.

In addition to this 9.36% holding, as previously announced on June 1, 2015, Plus500 founders and members of management, representing 35.6% of Plus 500’s issued ordinary share capital, have undertaken to procure the vote in favor of Playtech’s cash offer of 400p per Plus500 share.

It was also revealed today that Plus500 was almost sold for $1.4 billion, double the current Playtech offer, to CVC Fund, a $71 billion private equity firm. The fund was conducting a due diligence test on a deal to get joint control of Plus500 for £8 a share, according to the Israeli financial portal, TheMarker. The process stopped after Plus500 froze some of its UK accounts for additional AML testing and its share price collapsed.

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M&A Track Record

Earlier this morning, Playtech announced that it is raising additional funds that can be used to strengthen its bid for Plus500, or to acquire another “mid-size broker.” The placing of up to 29,050,000 ordinary shares, with the price per placing share to be determined through an accelerated bookbuild, represents approximately 9.9% of the company’s current issued share capital

In an extensive analysis of Teddy Sagi’s business strategy, Finance Magnates has looked into the prospective M&A.

It seems that Plus500, as we know it, is going to change materially, given that it can no longer operate in a way other FCA regulated brokers are hesitant in on-boarding clients.

Plus500 will have to reinvent itself anew in order to stand out from the crowd in the UK space, and in any case, its short-term profitability is going to significantly suffer from the downtime related to compliance issues.

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