The Australian video game group, which has struck a Â£ 2.1 billion deal to buy Playtech, has urged the City watchdog to seek clarification on the intentions of a group of Asian investors who have amassed a large stake in the London listed company.
Sky News has learned that Aristocrat and Playtech have contacted the takeover panel to get a determination that Asian shareholders, including the owner of Birmingham City Football Club, are acting as a concert night.
Market watchers have been puzzled in recent weeks amid a surge in stakes in the Far East at a price far above the price of 680p per share that Aristocrat agreed to pay for Playtech.
Between them, the Asian investors, including Karen Lo, a wealthy heiress, now own more than 20% of the shares of Playtech, and could even hold a collective stake large enough to block the Aristocrat deal.
Under the terms of its offer, Playtech needs at least 75% of the voting shareholders to support Aristocrat’s offer.
People close to the companies said they were “mystified” by the intentions of Asian investors and suggested on Tuesday that they might be interested in acquiring Playtech’s unregulated gaming business in Asia.
Aristocrat has already indicated in its offer documents that it “will not operate or provide services in any market that would jeopardize the existing licenses of the combined group”.
He added that he would consider selling or closing any business or operation that risked doing so.
One person familiar with the situation expressed concern about the Takeover Panel’s ability to extract enough information to enable it to determine whether Asian-based investors were acting in concert.
Such a move that would have implications for their ability to further develop their stake in Playtech and trigger their own mandatory bid if their combined stake exceeds 29.9 percent.
The uncertainty over their potential blocking stake comes weeks after Gopher Investments, which has close ties to Asian-based entrepreneurs, withdrew from the fray after exploring the mounting of a counter-offer.
Earlier this year, Gopher fought an uphill battle to acquire Playtech’s financial trading arm, Finalto, for $ 250 million.
The picture has been further clouded by the emergence of a potential new bid from a squad led by former Formula 1 team boss Eddie Jordan.
Mr Jordan and his JKO Play partners have put the finishing touches on a bid of around 750 pence which they hope will get a recommendation from Playtech’s board of directors.
Their offer would be structured in cash or with a partial equity alternative to allow existing Playtech investors to remain part owners of the company.
The latter option is seen as attractive due to ongoing merger talks between Caliente Interactive, an online games company operating primarily in Mexico – and in which Playtech holds the right to acquire a significant stake – and Tekkorp Digital, a New York-listed company special purpose acquisition company (SPAC).
Under the plans to finance the merger, $ 250 million would be invested in a PIPE – private investment in public capital – by the Spanish-language broadcaster Univision and its shareholders, with an additional $ 190 million from other investors. institutional.
Sources in the city said Caliente is expected to exercise its option on the 49% stake in Playtech, triggering a payment to shareholders of the UK-based company.
This payment would however be accelerated within the framework of a takeover bid on Playtech formulated by Mr. Jordan via the creation of a contingent value right (CVR).
Shares of Playtech, which has a market cap of over Â£ 2.2 billion, were trading at around 745 pence on Tuesday.
Playtech is in debt of around Â£ 600million, meaning that an offer of around 750p per share would give it an enterprise value of around Â£ 3bn.
Under Aristocrat’s offer, a number of irrevocable undertakings he obtained from Playtech shareholders would lapse if a rival suitor offered a price at least 10% higher than his offer.
This implies that Mr Jordan would have to bid at least 748p per share to get a recommendation from the board.
Mr. Jordan sold his eponymous F1 team in 2005 and has since been involved in various businesses, while also becoming a media expert on the sport.
JKO has a deadline of January 5 to submit a formal offer.
Playtech claims to be the world’s largest provider of online gaming and sports betting software.
The global gambling industry has seen a deluge of major corporate transactions this year, including the UK takeover of William Hill by Caesars Entertainment, with its UK operations subsequently being acquired by 888, the London-listed group.
More recently, DraftKings, a US-based gaming giant, abandoned its plans to bid for Entain, the owner of Ladbrokes and Coral in the UK.
Spokesmen for Playtech, Aristocrat and JKO all declined to comment.