Playtech stands firm after criticism of Plus500 bid

Playtech stands firm after criticism of Plus500 bid

Tuesday, June 9, 2015 Totally Gaming
Playtech chief Mor Weizer has not convinced all Plus500 shareholders

Playtech has defended its offer for Plus500 after it was opposed by one of the online trading operator’s biggest shareholders.

Odey Asset Management, which owns 25 per cent of Plus500, said it believes the 400p per share offer “materially undervalues” Plus500, whose stock was priced at 369.44p on Tuesday morning compared to the 770p it was trading at just a few weeks ago.

While Odey suggests that recent regulatory problems and negative publicity in the UK have created that significant drop, Playtech today stood firm on the offer that was approved by Plus500's board last week.

A Playtech spokesman told “We believe we've offered a fair price and that the process is ongoing."

Playtech announced last week it had agreed to acquire the entire ordinary share capital of Plus500 in a deal that values the company at approximately £459.6m (€627.2m/$702.2m).

At the time, Playtech chief executive Mor Weizer told that the company had "no concerns" about the bid despite Plus500 coming under scrutiny by the UK’s Financial Conduct Authority (FCA) over its anti money laundering (AML) checks.

As Plus500 attempted to comply with legal requirements, customers were left irate at not being able to access their accounts.

Plus500's board last week described the Playtech offer as "fair and reasonable", and their combined backing will make up 35.6 per cent of votes when a General Meeting decides upon the success of the bid. 

However, in a regulatory statement, Odey said: “In our view 400p materially undervalues Plus500 and we do not intend to vote in favour of the cash acquisition of Plus500 at this price.

"Even considering the current regulatory issues and near term risks, we believe the intrinsic value of the business on a longer term view is materially higher than 400p.

“We welcome Plus500 management's approach to Playtech's proposed cash acquisition, which allows other potential bidders the opportunity to appraise Plus500 with the same information as Playtech, and which allows management to cease its commitment to Playtech's proposed cash acquisition should another bidder present a higher offer.”

Meanwhile, Plus500 says it is making progress in the reapproval of customer accounts to satisfy the FCA, with up to 40 staff working on the project.

The company said that at close of business on Monday approximately 23,000 customers had logged into their account since May 18 - the date on which Plus500UK froze activity on existing customer accounts - and of these 10,147 customers had completed the remedial AML procedures. Some 8,457 customer accounts have now been fully reviewed by the remediation team and unfrozen, thereby enabling those customers to trade and to deposit and withdraw funds.

Gal Haber, Plus500 chief executive, said: "We have made progress in reapproving customer accounts during the last week and as a result expect a majority of clients who have completed the remedial AML procedures to be unfrozen within the previously expressed timeline."


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