Jason Ader: Playtech is ideal candidate for private takeover
Activist investor, who owns approximately 5% of Playtech, described the firm as the most undervalued gaming company in the world
Playtech would be the ideal candidate for a leveraged buyout (LBO), according to hedge fund activist and Playtech shareholder Jason Ader.
LBOs are often used to take public companies private, with the company’s own assets used as collateral for the loans to acquire the company.
Speaking at the Sohn Investment Conference in London yesterday, Ader said it would not take a lot of cash to take the business private.
Playtech had around €873m cash on its balance sheet at the end of Q2 and strong cash flow, making it an ideal candidate for a leveraged buyout.
Jason Ader
Ader, whose SpringOwl Asset management owns approximately 5% of Playtech shares worth roughly $100m, was also asked by a panel moderator for his best investment opportunity.
He pitched Playtech, saying it has the potential to double its EBITDA in the US alone, describing it as “the most undervalued gaming company in the world.”
The firm is expected to announce its first US partnership in the coming days, having recently opened an office in New York.
Ader reiterated his previous advice that Playtech should focus on its core gaming business, advocating the firm to sell a minority interest in its Asian business to a local partner and its TradeTech subsidiary to a financial services company.
Shares in Playtech jumped 2.5% following the conference yesterday but gave most of those gains back this morning.
Playtech share price