Playtech reveals future plans as Plus500 deal is terminated

Playtech reveals future plans as Plus500 deal is terminated

Monday, November 23, 2015 Totally Gaming
CEO Mor Weizer's company is committed to growth in financials

Playtech said it remains “committed” to growing its financials division despite today (Monday) terminating its proposed acquisition of Plus500.

The £459.6m (€627.2m/$702.2m) deal was first announced in June, with Plus500 shareholders agreeing to the takeover in July.

However, following regulatory delays and an expression of confidence over the deal last week, Playtech said that a conversation with the Financial Conduct Authority (FCA) on Friday afternoon led to it withdrawing its change of control application.

The company said it had always been confident of resolving “certain concerns” expressed by the FCA, but explained that following Friday’s conversation “the steps being proposed to address these concerns will not sufficiently satisfy the FCA to enable Playtech to obtain the FCA's approval by December 31, 2015.”

Playtech - whose shares were down almost 9 per cent today - said in a statement that it will continue to pursue opportunities for growth in the financial sector, but admitted that the loss of Plus500 would affect its prospects in the near to medium term.

The statement read: “Playtech remains committed to growing its financials division, both through driving organic growth and through acquisition, although this vertical is unlikely to have the scale of contribution to the group in the near to medium term that had previously been anticipated as a result of the acquisition of Plus500 not completing.

“Playtech is in the process of evaluating its options with regards to its significant cash balances following the termination of the acquisition of Plus500, taking into account the availability of suitable value-enhancing acquisitions across the business.”

Playtech also said it believes the rejection of the Plus500 deal increases the likelihood that its bid for AvaTrade could now be terminated by the financials operator’s owners. Playtech announced in early October that it was appealing the Central Bank of Ireland’s opposition to the acquisition of Ava Trade.

While its financials division, which acquired TradeFX for a deal that could rise to €458m earlier this year, has been hit hard by the Plus500 and AvaTrade deals, Playtech reiterated its commitment to its core gaming services division. 

The company said: “Playtech's gaming division continues to enjoy double-digit underlying growth with a strong pipeline of opportunities providing confidence in maintaining momentum.”

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