Gopher Investments Makes USD 250 Million Offer for Playtech’s Finalto Business
Gopher Investments (“Gopher”), a 4.97% shareholder in Playtech plc (“Playtech” or the “Company”) and an affiliated entity of TT Bond Partners (“TTB”), today announces that it has made an indicative offer to the Board of Directors of Playtech to acquire Finalto for USD 250 million in cash (the “Offer”). This represents a 47% premium to the base proposal offered by Finalto’s management team backed by a consortium led by Barinboim Group (the “Consortium”).
Gopher’s all-cash Offer includes no deferred or contingent component, delivering full value up front and allowing Playtech to receive proceeds with certainty and in full on completion, securing the clean break which the Board has declared as an objective of the transaction. Gopher’s Offer will be financed from funds which are immediately available.
Based on Playtech’s most recent public disclosures,1 Gopher’s proposed valuation represents:
- a 47% premium (USD 80.0 million) to the base proposal from the Consortium;2
- a 35% premium (USD 65.0 million) to the guaranteed consideration in the Consortium’s proposal;3
- a 19% premium (USD 40.0 million) to the maximum consideration payable by the Consortium, including full contingent consideration (notwithstanding the challenging targets attached to this contingency as detailed in the circular and further clarified below);4 and
- a compelling Apr-21 LTM EV/EBITDA multiple of 27.2x.5
Gopher has carried out a detailed review of Finalto from a range of publicly available resources. As such, it is prepared to perform only limited due diligence, anticipated to take no more than 3 weeks, before seeking to enter into a fully binding offer for Finalto on terms that are materially equivalent to those entered into with the Consortium. Gopher does not expect its binding offer to be subject to any conditions beyond the equivalent conditions to which the Consortium’s proposal is subject, namely Class 1 shareholder approval and mandatory regulatory clearances.
Gopher does not dispute the disposal of Finalto as a non-core asset, but it believes that Finalto’s attractive growth prospects are not fairly reflected in the value of the Consortium’s offer that has been recommended by the Board.
TTB has significant experience in evaluating investment opportunities in the technology-driven financial services sector. It is strongly of the opinion that the digital financial services industry will continue to grow exponentially, driven by factors such as the underlying growth of financial assets globally, the low interest rate outlook, the adoption of technology platforms for ease of execution and the rapid expansion of the emerging middle class across growth markets. With additional investment and expansion of certain product areas and geographies, TTB believes the Finalto business could significantly improve its stability of performance and increase its profitability. TTB has worked with its portfolio investments on developing strategic growth plans, and believes that, under its ownership, Finalto would have the potential for significant additional expansion.
Gopher presented its Offer to Monaco’s Board on 29th June 2021 and today received a written response from the Board, in which it stated that it believes that it has limited flexibility to engage with Gopher under the terms of the SPA that it entered into on 26th May with the Consortium which Gopher believes is an unusual constraint to have allowed given the other protections in place. As such, Gopher urges shareholders to vote against the Consortium offer at the General Meeting on 15th July 2021 which will give the Board the ability to consummate a transaction with Gopher
Gopher considers its Offer to be full and fair, representing appropriate value for the potential of the Finalto business and a clear and material valuation uplift for Playtech shareholders. Gopher reiterates that it is fully funded and is in a position to proceed immediately and expeditiously towards a consensual and recommended transaction.
Rothschild & Co. is acting as Financial Adviser to Gopher Investments on the Offer for Finalto.
White & Case LLP is acting as legal advisor to Gopher Investments on the Offer for Finalto.
1 Source: Class 1 Circular dated 24 June 2021.
2 Consideration from the Consortium of USD 170 million payable in cash on completion.
3 Guaranteed consideration from the Consortium of USD 185 million.
4 Contingent consideration of USD 25 million appears to be subject to achieving challenging targets there is no certainty of realising (TTB notes from its review of the SPA that the previously undisclosed cashflow target is set at a cumulative net inflow of £85m over a 30 month period).
5 Adjusted EBITDA for the twelve month period ended 30 April 2021 of USD 9.2 million.
About Gopher Investments and TTB Bond Partners
Gopher is an investment vehicle backed by investors with experience in gaming and financials, and is an affiliate of TT Bond Partners (“TTB”). TTB, through its Hong Kong regulated entity, TTB Partners Limited, which is advising Gopher on this transaction, is an investment and advisory firm based in Hong Kong, whose founders and professionals have over 30 years’ experience in the financial services industry investing and advising on over $250 billion of transactions in the US, Europe, and Asia.
TTB has significant experience in investing in assets in the technology-driven financial services sector. Recent investments include: Xen Financial, a next-generation investment platform providing fractionalised access to private markets; KASB, a stock brokerage in Pakistan, and creator of KTrade, Pakistan’s leading retail stock trading app; Finhabits, a US-based leading bilingual money app designed for Latinos’ financial success; Selfin, a digital microlending platform focused on financial inclusion of microenterprises in India; Aspen Digital, an innovative technology-driven platform that empowers asset and wealth managers to offer digital asset products with confidence, driving mass adoption of digital assets and blockchain technologies; Coherent, a Hong Kong based insurtech company building digital platforms for insurers; and M7 Real Estate, a UK and EU based real estate asset manager.
N.M. Rothschild and Sons Limited ("Rothschild & Co"), which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting exclusively for Gopher Investments and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Gopher Investments for providing the protections afforded to clients of Rothschild & Co nor for providing advice in connection with any matter referred to herein or the other matters referred to herein.
No offer or solicitation:
This announcement is for information purposes only and is not intended to and does not constitute or form part of any offer or invitation to purchase, acquire, subscribe for, sell, dispose of or issue, or any solicitation to purchase, acquire, subscribe for, sell, dispose of or issue any securities in Playtech in any jurisdiction.
The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to the laws of other jurisdictions should inform themselves of, and observe, any applicable restrictions or requirements. Any failure to comply with these restrictions may constitute a violation of securities laws of any such jurisdictions. To the fullest extent permitted by law, Gopher and TTB disclaim all and any responsibility or liability for the violation of such restrictions by such person.
Cautionary note regarding forward looking statements:
This announcement contains certain forward looking statements with respect to the financial condition, results of operations and businesses of Playtech, the Playtech group and Finalto and certain plans and objectives of Playtech. All statements other than statements of historical fact are, or may be deemed to be, forward looking statements. Forward looking statements are statements of future expectations that are based on Gopher and TTB’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements.
Statements containing the words "intends", "aims", "anticipates", "assumes", "budgets", "could", "contemplates", "continues", "plans", "predicts", "projects", "schedules", "seeks", "shall", "should", "targets", "would", "believes", "anticipates", "may", "will", "estimates" "expects" and "outlook" or, in each case, their negative or other variations, or words of similar meaning are forward looking.
Each forward looking statement speaks only as of the date of the particular statement. Gopher and TTB do not undertake any obligation publicly to update or revise any forward-looking statement as a result of new information, future events or other information, although such forward-looking statements will be publicly updated if required by the Financial Conduct Authority of the United Kingdom, the London Stock Exchange plc or by applicable law. Given these statements involve risks and uncertainties, results could differ materially from those expressed, implied or inferred from the forward looking statements contained in this announcement. No representation or warranty, express or implied, is given by Gopher and/or TTB or any of their officers, employees or agents as to the achievement or reasonableness of, and no reliance should be placed on, any projections, estimates, forecasts, targets, prospects or returns contained in this announcement.
References to historical financial information of Playtech or Finalto in this announcement have been extracted without adjustment from the relevant published financial information of Playtech and/or Finalto. Any historic financial information, projections, estimates, forecasts, targets, prospects or returns contained on this Site are not necessarily a reliable indicator of future performance. Nothing in these materials should be relied upon as a promise or representation as to the future.
Certain figures included in this announcement have been rounded. Accordingly, figures shown for the same category may vary slightly and figures shown as totals may not be an arithmetic aggregation of the figures that precede them.
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