The battle for Finalto continues: Playtech confirms recommendation, Gopher responds

Playtech has revealed that the adjourned General Meeting to approve the acquisition of its financial division Finalto will be resumed on 18 August 2021. The online gaming and sports betting software provider has confirmed its recommendation for the Consortium’s binding agreement.

In its announcement, Playtech highlighted that Gopher Investments’ recently received proposal for the acquisition of Finalto is uncertain.

The company said in its announcement:

The Board’s stated strategy remains to simplify Playtech’s business and to dispose of Finalto for the maximum available proceeds. The proposal received from Gopher Investments Gopher is uncertain in terms of its deliverability, principally because it is not binding in nature and remains subject to a number of conditions.

Playtech agreed to sell Finalto to the to a consortium led by Barinboim Group for $210 million. The two companies signed a binding agreement which restricts Playtech from negotiations with any third party regarding the sale of its financial unit. However, the Consortium has granted permission for Playtech to ask a limited set of questions in order to clarify the ownership Gopher.

The company stated:

Playtech has not yet been able to achieve the necessary clarity on Gopher’s ultimate ownership and funding structure, source of funds or ability to obtain the required regulatory clearances.

Playtech finalto

The Playtech added:

Shareholders should ask why Gopher continues to hide and should also be suspicious of Gopher’s credibility, particularly given that disclosure is crucial when buying a highly regulated business. Furthermore, the firm associated with Gopher, TT Bond Partners, is a small boutique brokerage that raises money from Chinese investors. Gopher’s behaviour has not been well received by the market; since it first announced its interest, Playtech’s share price has fallen by nearly 17%.

Gopher Investments responded today with disappointment in Playtech’s recommendation for its shareholders to vote in favor of the acquisition by the Consortium. The 4.97% shareholder in Playtech said that that its recently published supplementary circular does not contain a “full and fair” representation of their interaction.

Gopher clarified that it has responded promptly to Playtech’s request for information and highlighted that the confidentiality process between the two companies was put on pause on 26 July after Playtech advised Gopher that it would be issuing a supplementary circular.

Gopher said:

Since 26 July 2021, Gopher has received: no further request for information from Playtech or its advisers, despite multiple interactions; no indication that the additional information requested was required for a change of recommendation nor that the Board would not be changing its recommendation; and no suggestion that Gopher had provided insufficient information for the Board to form a view on its proposal.

The company stated:

Additionally, Gopher understands that Playtech may have received interest in Finalto from other potential acquiring parties since the date of the adjournment. As the second largest shareholder in Playtech, with approximately USD 100 million of capital invested, Gopher’s interests are aligned with those of its fellow shareholders in looking to maximise value for Finalto and would expect the Board to properly consider all credible offers.  Gopher strongly believes that Finalto’s attractive growth prospects are not fairly reflected in the value of the Consortium’s offer that has been recommended by the Board.

Gopher continued to urge the shareholders to vote against Consortium’s offer.

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