Finalto (formerly TradeTech), the financial trading unit of gambling technology firm Playtech, has received a $250 million takeover offer from Gopher Investments, news emerged last week.
Gopher is an investment vehicle backed by investors with experience in the gaming and financial sectors, and is an affiliate of Hong Kong-based boutique advisory firm.
In a July 2 statement, Playtech confirmed that it received a non-binding conditional offer from Gopher on June 29, but said that the “timing at which Gopher has chosen to come forward with its indicative proposal makes it very difficult for the Playtech Board to properly assess the proposal.”
In late May, the major gambling technology provider announced that it has entered into a binding agreement for the sale of Finalto to an Israeli consortium led by Barinboim Group and backed by Leumi Partners Limited and Menora Mivtachim Insurance Limited for $210 million.
In its Friday statement, Playtech said that the terms of its agreement with the consortium bar it from engaging in “negotiations with any third party regarding a potential transaction involving the sale of Finalto.”
Shortly after Playtech announced that it would offload its financial trading unit to the Israeli consortium, reports emerged that at least one major investor in the company was disappointed by the $210 million selling price and that a shareholder row was brewing over the matter at the time.
A Better Offer?
Gopher, which is currently a 4.97% shareholder in Playtech, is offering to pay the entire amount of $250 million in cash with no deferred or contingent component. In comparison, the consortium’s offer includes a $185 million initial payment and a $15 million deferred payment for up to two years, along with a $25 million contingent.
The higher price offered and the deal being an all-cash upfront one make Gopher’s proposal look significantly more attractive.
Announcing its offer last week, Gopher explained that it represents a 47% premium to the consortium’s base proposal and a 35% premium to the guaranteed consideration of that proposal. The investment vehicle further noted that it is offering a 19% premium to the maximum consideration payable by the other interested buyer.
Playtech formed its financial trading unit in 2017 after the $120 million acquisition of CFH Group and the $150 million acquisition of FX and CFD market maker Alpha Capital Markets. Finalto also includes Playtech’s retail FX brokerage arm Markets.com.
After extremely weak performance in 2019, Finalto saw its fortunes spike in the first half of 2020 amid increased market volatility and trading volumes caused by the coronavirus pandemic.
Finalto’s poor performance in 2019 forced Playtech to launch a review into the unit and its future within the larger group. The gambling technology powerhouse has been considering to sell its financial trading division for nearly two years now. News about the consortium’s interest in Finalto first emerged last summer.
In early 2021, Playtech rebranded its financial unit as Finalto (formerly TradeTech) saying that the new name would better reflect what it does and how it does it as finance is at the core of its operations and it always aims higher.
Source: Gopher Investments Makes USD 250 Million Offer for Playtech’s Finalto Business, BusinessWire, July 2, 2021