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Screenshot of a breaking news alert e-mail from Q2 2017
For the first time since he founded the company in 1999, Teddy Sagi might soon no longer be the largest shareholder in Playtech PLC (LON:PTEC).
Playtech announced after the close of London Stock Exchange trading on Monday that it has been advised that Teddy Sagi’s holding company Brickington Trading Limited is planning to sell approximately 32 million shares in the company. At the current share price of £9.93 – near an all-time high for the stock – the share sale could net Sagi about £318 million, or USD $404 million.
The 32 million Playtech shares represent approximately 10.1% of the company’s issued share capital, and more than half of Sagi’s current 17.8% interest in Playtech. Assuming that the sale goes ahead as planned, Mr. Sagi will own just 7.7% of the company, slightly more than outside shareholders Morgan Stanley and Paris based asset manager Boussard & Gavaudan which acquired 13 million Playtech shares from Mr. Sagi back in March.
Brickington plans to sell the shares via an accelerated bookbuild through underwriters Goodbody Stockbrokers, Shore Capital, and UBS.
The reason given by Brickington for the share sale was to allow Mr. Sagi to further diversify his and his family’s investment portfolio. And, in particular, to help finance a significantly increased focus on real estate and real estate related investments in respect of flexible working hubs and e-commerce.
As part of its agreement with the underwriters, Brickington has agreed to a 180 day lockup of the rest of its Playtech shares – meaning that Mr. Sagi will not dispose of any further Playtech shares for a period of at least 180 days, subject to the consent of UBS as well as customary exceptions.
By virtue of selling his Playtech stake to below 15%, Mr. Sagi and Brickington will terminate its special major shareholder “Relationship Agreement” with Playtech, based on conditions of Brickington’s sale of Playtech shares last November. That agreement allowed Sagi to appoint directors to Playtech, as well as provide other inter-company services to the company.
Based on previous similar share sales, we would expect that the sale would happen overnight, but at a healthy 5-10% discount to today’s closing price of nearly £10. The actual discount will of course depend on demand from institutional investors for the shares, which (as we noted above) are sitting near all-time highs.