- Playtech shares drop 19% after investor group walks away
- Suitor abandons bid due to challenging market conditions
- Strong first half performance
Gambling software maker Playtech (PTEC) was out of favour today after its latest suitor, an investor group formed and advised by TTB Partners, decided not to make an offer for the company due to ‘challenging’ market conditions.
The shares crashed 19% to 419.4p, effectively taking them back to where they traded before Australian gaming company Aristocrat made an all-cash 680p per share offer on 18 October 2021. That offer ultimately failed to attract sufficient shareholder support.
TTB had indicated that any potential offer would have been above Aristocrat’s 680p offer. It said it remained supportive of the Playtech board and management team.
Despite the latest setback, the Playtech board said it continues ‘to consider options to maximise shareholder value’.
STRONG FIRST HALF
The underlying business appears to be in fine fettle after Playtech delivered an ‘excellent’ first half performance, prompting the board to say it was ‘very confident’ about the positive long-term prospects of the group.
Due to strong momentum across both B2B (business to business) and B2C (business to consumer) divisions, the company expects to deliver first half EBITDA (earnings before interest, taxes, depreciation, and amortisation) of more than €200 million.
This continues the trend seen in the first quarter when the group generated EBITDA of more than €100 million.
Chief executive Mor Weizer commented: ‘Playtech carries strong momentum going into H2 2022 and continues to perform very well across its core B2B and B2C businesses.
‘This performance reflects the quality of our market-leading technology offering and the hard work and commitment of our talented team.
‘We remain confident in our long-term growth prospects and, in particular, our ability to benefit from the structured agreements that are already allowing Playtech to access newly opened gambling markets.’
On 11 July Playtech completed the $250 million (around £210 million) all-cash sale of its financial trading division Finalto to Gopher Investments, which is a minority shareholder in Playtech.
The company said the sale represents a ‘significant step’ in simplifying the group and most of the proceeds will be used to repay its revolving credit facility.
