Eddie Jordan-led Consortium May Spoil Aristocrat’s Playtech Party

A potential bid from a consortium led by former F1 team owner Eddie Jordan is threatening to derail Aristocrat’s acquisition of Playtech, Sky News reported.

New Contestant

JKO Group, a company established to seek opportunities in the international gaming arena by former F1 team owner Eddie Jordan and former Scientific Games executive Keith O’Loughlin, emerged as a candidate to acquire the supplier of online gaming and sports betting software.

The group is said to be mulling an offer for Playtech that includes cash and contingent value rights based on Playtech’s stake in another company, a joint venture with Mexico-oriented gambling business Caliente Group. In a separate process, Caliente and Playtech are discussing a potential merger for their joint venture with a special purpose acquisition company (SPAC) to go public.

According to the report, JKO Group is negotiating with Centerbridge Partners, a US-based investor, to secure financing for the bid, while Global Leisure Partners, a merchant banking boutique firm, is said to be the consortium’s adviser.

The consortium is believed to have made a preliminary approach to Playtech’s advisers, but given the complexity in the structure of the bid, there is no certainty a firm bid for the London-listed supplier of online gaming and sports betting software will materialize.

The potential of another bid will certainly be good news to Playtech shareholders who are hoping that a takeover battle will further raise the price of their holdings at the company that boasts a market capitalization value of £2.2 billion ($2.97 billion).

Bidding War?

JKO Group is the third company showing interest to acquire Playtech, following the AU$5 billion ($3.7 billion) offer tabled by Australian-based manufacturer of gaming equipment Aristocrat Leisure, valuing the company at £6.80 ($9.35) per share, and the subsequent approach by Playtech’s second-largest shareholder, Gopher Investments, which is still to make a firm bid believed to be in the region of $4.07 billion.

Gopher is believed to hold the upper hand to Aristocrat as the Hong Kong-based investment firm is still finalizing the $250 million deal for Playtech’s financial arm Finalto, the completion of which is one of the conditions in the bid tabled by Aristocrat.

Any new bid by Gopher or the consortium led by Eddie Jordan should go at least 10% above the price Playtech already accepted from Aristocrat according to the terms of the Australian company’s offer, suggesting a minimum of £7.48 ($10.28) if a bid is to gain the Board’s recommendation.

Responding to the news of JKO Group’s approach, Aristocrat released a statement claiming that it continued to work with Playtech towards closing the transaction, moving along with the regulatory approval process.