A $5 billion takeover of online gambling giant Playtech will not go ahead after suitor Aristocrat Leisure (ASX: ALL) failed to get enough votes in its favour at a meeting of the target’s shareholders.
The company says because votes cast in favour of the takeover of Isle of Man-based Playtech fell short of the 75 per cent threshold required to implement the deal, the acquisition has therefore lapsed.
Just 56.13 per cent of votes were cast in favour of the takeover, with 43.87 per cent of votes cast against the deal which would’ve seen the Australian gambling giant acquire the online gambling software supplier.
Aristocrat’s confirmation of the deal lapsing comes after the company posted an evening announcement to the ASX yesterday, detailing how the company expected Playtech shareholders to not hit the threshold required of votes in favour.
In the statement, Aristocrat said a number of “material investors” did not “engage meaningfully about their views on the recommended acquisition” and that they accounted for the majority of votes cast against.
The company says the majority of these shareholders arrived on Playtech’s register after the acquisition proposal was announced.
“We are disappointed that our recommended offer to acquire Playtech plc is expected to lapse. Notwithstanding extensive due diligence on Aristocrat’s part, developments since the announcement of our offer have been highly unusual and largely beyond Aristocrat’s control,” Aristocrat CEO and managing director Trevor Croker said.
“In particular, the emergence of a certain group of shareholders who built a blocking stake while refusing to engage with either ourselves or Playtech materially impacted the prospects for the success of our offer, which had been recommended by the Board of Playtech plc.
“The long term interests of our shareholders are the absolute focus of M&A at Aristocrat. We will always take a highly disciplined, strategic approach to our investment choices, consistent with our customer-centric philosophy.”
Croker said Aristocrat would still be looking to expand its online gambling capabilities despite the acquisition falling through.
“Our focus now shifts to accelerating our plans for alternative online RMG (real money gambling) scaling options, and continuing to execute our growth strategy, in a way that is consistent with our rigorous investment criteria, high regulatory standards and integrity,” Croker said.
“We look forward to sharing more details with shareholders as we move forward.”
Shares in ALL are down 0.90 per cent to $40.92 per share at 11.34am AEDT.
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