Gopher considers a £3 billion counterbid for a gambling software company Playtech

November 8, 2021

Rothschild is advising Gopher Investments on a potential acquisition approach for Playtech, the world's largest supplier of online casino software.

An investment entity that began developing a position in Playtech, a London-listed gambling software company, earlier this year is considering a £3 billion purchase.

Sky News has learned that Gopher Investments is working with Rothschild bankers on an offer that would beat out Aristocrat Leisure's recommended bid revealed last month.

On Sunday, city officials indicated Gopher's considerations were not sure to result in a formal offer, but that it was "seriously" considering it.

On Monday morning, Gopher is likely to publish a statement confirming its interest in bidding for the entire Playtech.

A Playtech bidding war would be the latest in a frantic year of corporate deal-making in the global gaming business.

Advertisement Playtech's stock soared in October after its board approved a 680p-per-share bid from Aristocrat. The company has a market capitalization of about £2.2 billion.

The offer valued Playtech at £2.7 billion, including its £600 million debt load.

If any alternative suitor paid a price at least 10% more than the Aristocrat deal, a series of irreversible agreements from Playtech shareholders to accept the offer would dissolve.

To get a board recommendation, Gopher would have to bid at least 748p per share.

Playtech bills itself as the largest provider of online gaming and sports betting software in the world.

This year, Gopher has emerged as one of Playtech's most prominent shareholders, waging a hard battle to acquire the company's financial trading unit, Finalto, for $250 million.

The Aristocrat offer for Playtech is contingent on the completion of the sale of Finalto to Gopher. Given that the Finalto transaction has yet to be completed, it was unclear this weekend how Gopher would arrange an offer for the remainder of Playtech.

Gopher claims itself as "an affiliate" of TT Bond Partners (TTB), who advised Gopher on the Finalto deal through its Hong Kong-regulated firm.

TTB claims to have "extensive expertise" investing in technology-driven financial services companies in the United States, Pakistan, India, and Hong Kong, among other places.

"As a substantial stakeholder in Playtech, Gopher is pleased to execute a transaction offering value for all shareholders," Teresa Teague, a partner at TTB, said of the Finalto acquisition. "Gopher looks forward to working with the Playtech board and continuing its constructive discussion to encourage growth."

In recent days, large volumes of Playtech stock have been traded, causing market speculation about a probable counterbid.

The worldwide gambling industry has experienced a slew of large mergers and acquisitions this year, the most notable of which being Caesars Entertainment's acquisition of William Hill, followed by 888, the London-listed group's acquisition of its British assets.

Recently, DraftKings, a major gaming company based in the United States, backed out of a bid for Entain, the owner of Ladbrokes and Coral in the United Kingdom. On Sunday, Playtech declined to comment, and Gopher's public relations team has been contacted for comment.