Playtech shares drop on Sagi's £329m stakeholding sale

Playtech shares drop on Sagi's £329m stakeholding sale

Wednesday, November 30, 2016
Majority shareholder sells down holding

Playtech’s shares tumbled more than 7 percent on Wednesday after major shareholder Teddy Sagi sold a 10 percent slug of the company at a discount to the prevailing price, but enthusiasm among investors remained undimmed as the share sale was oversubscribed.

The news on Tuesday afternoon that Sagi’s investment vehicle Brickington would be selling over 32 million shares in the online and land-based supply giant was followed by a further notice on Wednesday morning that due to demand, Brickington agreed to increase the sale by a further 6.5 million.

The share sale raised a total of £329m and reduces Sagi’s interest in Playtech to 21.6 percent.

The share price promptly fell back from its 920p level earlier this week to hover around the 850p sale price level on Wednesday morning.

Simon Davies, analyst at Canaccord, noted that the sell-down represented a further diversification on the part of Sagi who has seen three further companies he is majorly involved in – MarketTech, Safecharge and Crossrider - seek London listings in recent years.

The company noted that Sagi has a six-month lock-up on his remaining stake. A spokesperson for Playtech said it had no further knowledge of whether the billionaire would seek to reduce his holding further next year.

Over the years, Sagi has sold various of his other businesses to Playtech in related-party sales, including the PTTS marketing and services business and more recently the TradeFX consumer-facing financial trading business. Those two sales raised a combined €488m.

Davies said the news of the Sagi sell-off would provide a long-term fillip for shareholders. “We see the sell-down by Sagi as a logical progression, with the added advantage of boosting liquidity in the shares.”

David noted that Playtech had enjoyed a successful 2016 with first half-half revenues up 10 percent, a trend which “accelerated modestly” in the third quarter.

Playtech remains highly acquisitive. Among the more significant buys in recent months came in the summer when it announced it had bought a 90 percent majority stake in self-service betting terminal (SSBT) provider Best Gaming Technology (BGT) for €138m.

Just today it also announced the completion of its most recent acquisition, the CFH B2B financial brokerage platform for $120m.

Totally Gaming says: The ins and outs of Teddy Sagi’s involvement in the online gambling industry have held a fascination for many and this news is sure to excite much comment. The importance of the share sale, however, lies at the other end of this transaction and the evident enthusiasm on the part of the market to buy further into the Playtech story.

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