Playtech terminates £460m Plus500 takeover
Supplier giant suffers blow as proposed acquisition of CFD firm fails to gain regulatory approval
Playtech’s £460m acquisition of financial trading firm Plus500 has been called-off after the proposed deal failed to gain regulatory approval from the UK Financial Conduct Authority (FCA).
Despite having previously given assurances that the delayed transaction would complete, Playtech this morning said the takeover, which was announced in June, would be unlikely to receive the green light ahead of a previously set long-stop date of 31 December 2015.
Playtech said it had been in constant dialogue with the FCA for a number of months in a bid to satisfy “certain concerns raised” by the regulator but had now conceded defeat in these attempts.
“[â¦] the board of Playtech is now of the view that the steps being proposed to address these concerns will not sufficiently satisfy the FCA to enable Playtech to obtain the FCA’s approval by 31 December 2015, and is therefore withdrawing its change of control application to the FCA,” a statement read.
In addition, the firm also warned the termination could bring to an end its proposed acquisition of Dublin-based CFD broker Ava Trade, with the two parties currently appealing against the Central Bank of Ireland’s (CBI) objection to the deal.
The CBI’s decision to reject the takeover triggered a termination right for Ava Trade and while it has yet to exercise this right, Playtech said the termination of the merger agreement with Plus500 “increases the risk that the Ava Trade sellers may do so”.
Cancellation of the Plus500 deal will be a major setback for Playtech as the company looked to add to a financials division launched earlier this year through the £333m acquisition of TradeFX.
Playtech’s share price was down 9% this morning and analyst Simon French of Cenkos Securities described the news as a “clearly very disappointing development” and one which would also lead to the likely termination of the Ava Trade deal.
“As such the group’s fledgling financials division will remain just that for a while but with over 500m net cash the group will look to make additional acquisitions in both the gaming and financials divisions,” French added.
Playtech said it remained committed to growing its financials business through both organic and acquisitive means and was currently in the process of reviewing “the availability of suitable value-enhancing acquisitions across the business”.