Playtech has “no concerns” over Plus500 deal

Playtech has “no concerns” over Plus500 deal

Monday, June 1, 2015 Totally Gaming
Mor Weizer is positive about the bid for Plus500

Playtech chief executive Mor Weizer has told TotallyGaming.com that the company has "no concerns" about its bid for troubled online trading operator Plus500.

The gambling software development company reacted after details of the potential takeover were announced this morning, with Playtech set to offer £459.6m (€641.5m/$701m) in a deal that values Plus500 at 400p per share.

Plus500 shares were worth 770p in the middle of May, but fell as low 248p before the end of the month after the company was told that its anti money laundering checks were not sufficient by the UK’s Financial Conduct Authority (FCA).

Further bad press followed as UK customers were then left irate at not being able to access their accounts as Plus500 attempted to comply with legal requirements.

These problems contributed to a profits warning issued this morning, but Weizer expects the aid of Playtech’s huge resources to help Plus500 back to the top.

“We have no concerns," Weizer told TotallyGaming.com. "Playtech will be migrating the business to its own technology platform which will provide the infrastructure and CRM systems proven in the online gaming space to be the best in breed.”

Shares in Plus500 were this morning trading at around the 375p mark, slightly up on last Friday, despite the company admitting that it expects group revenue for 2015 to be lower than in 2014.

The company’s directors said that they intend to unanimously recommend that shareholders vote in favour of the acquisition and believe the recent regulatory scrutiny has “highlighted the advantages of expanding the operational infrastructure to support a business of its size”.

Gal Haber, chief executive of Plus500, said: “We are very proud to have built Plus500 in a short time into a significant player in the CFD market.

“Having been admitted to AIM at a share price of 115p on 24 July 2013 and paid significant dividends during this time, we believe that now is the right time to combine the business with Playtech who can provide additional infrastructure and expertise to add to our core skills in products, technology and marketing.”

Playtech believes the deal fits into its strategy of acquiring profitable, regulated, highly cash generative businesses with market-leading positions.

It added that the deal represents a “unique opportunity” due to Plus500’s market reach, advanced technology, product offering and existing customer relationships globally, which allows it to successfully attract and convert customers.

Weizer added: “Having recently completed the acquisition of TradeFX, the opportunity to acquire Plus500 will prove transformational for our ambitions to expand Playtech’s wider offering.

“As an immediately earnings enhancing acquisition, the combination of the two businesses is compelling, enabling us to apply our market-leading products and services to the enlarged financial trading business as we continue to execute our growth strategy for the group.” 
 

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