Playtech released an official response to Gopher Investments’ statement regarding the sale of Finalto, reaffirming its recommendation to shareholders to approve the bid of the Consortium led by the Barinboim Group.

Consortium Bid Still Recommended by the Board

Playtech confirmed the Board’s stated strategy to simplify the company’s business with a swift disposal of Finalto, and, while it seeks to achieve the maximum available proceeds of the sale, the proposal put forward by Gopher in July raised some questions around ownership and funding structure, as well as the ability of the bidder to receive regulatory approvals.

Playtech noted in the latest press release that the proposal was “uncertain in terms of its deliverability, principally because it remains not binding in nature and subject to a number of conditions.”

Playtech explicitly stated that it is unfamiliar with the chain of events described by Gopher in its press release dated August 3, where Gopher referred to a delay in signing a confidentiality agreement due to a planned circular by Playtech prior to the agreement.

Playtech concluded that Gopher did not provide satisfactory responses to the questions regarding the structure and funding of the Hong Kong-based investment fund; hence, the previous Board recommendation to shareholders to approve the Consortium proposal would not be changed.

Gopher’s Intervention Too Little Too Late

On July 2, Gopher Investments, a shareholder of Playtech with a 4.97% stake, tabled a $250-million cash bid in an attempt to disrupt the upcoming shareholder vote of the proposal from the Consortium.  Gopher’s bid represents a 47% premium to the Consortium offer, which was already recommended by the Board at Playtech for shareholder approval.

Following the late bid from Gopher Investments, Playtech decided to postpone the general meeting of its shareholders scheduled for July 15, pushing it to July 29, to open up time for the Board to request further information and evaluate the candidate’s ability to acquire the business as part of initial due diligence to assess the proposal.

And while such a postponement does not violate the binding agreement Playtech and the Consortium signed in May, the technology company was no longer able to engage in negotiation talks with third parties by the time of Gopher’s bid.

The Consortium on its behalf revealed information that even if Playtech shareholders do not approve its bid, Playtech will have to pay $8.8 million if they sell Finalto within a year for a price above $200 million.

Immediately after Playtech’s statement, Gopher released a statement of its own, expressing its disappointment from the Board decision and urging shareholders to vote against the Consortium bid.