In a move that may increase his stake to just under 50%, Playtech founder Teddy Sagi will underwrite £100 million to fund new acquisitions and joint ventures.
Playtech announced this morning that it has identified bolt-on deals costing £40 million and potential joint ventures between €15 million and €30 million. The news is not surprising. After releasing first half results in August, the company highlighted "exceptional joint venture and near term acquisition opportunities currently under discussion in certain key markets."
Playtech revealed that 46.5 million shares at 215p will be listed via Brickington, Sagi’s investment vehicle that holds a 40.3% stake in the software provider, and other institutional investors.
The placing is at a 2.5% discount to Tuesday’s closing price. Brickington is underwriting at no fee and will grab as many of the 27.8 million shares available to other institutions as possible, potentially allowing the Israeli billionaire’s stake to hit 49.9%.
Further, Aim-listed Playtech announced that it was confident in obtaining a main market listing from the UK Listing Authority. The company also amended its dividend policy. It will now pay out 40% of profits, split one-third at interim and two-thirds at final dividend.
Some analysts are concerned over Sagi’s growing influence. Simon French, equity analyst at Panmure Gordon, thinks "the market will be unnerved by Brickington’s ability to increase its shareholding to 49.9 per cent."
However, others are more positive. James Hollins of Evolution Securities said while Sagi’s increased stake "may be viewed negatively," the move was "a sensible approach in further cementing [Playtech's] market leadership."
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