Playtech Forced To Abandon Plus500 Acquisition
The much talked about deal of Playtech acquiring spread betting business Plus500 has fallen apart. In June Playtech announced they had plans to acquire Plus500 for £460m in an effort to expand into the world of forex. Playtech announced today they were pulling out of the deal as there were regulatory issues that could not be overcome.
Playtech were informed by the Financial Conduct Authority that they had certain concerns over the deal including Playtech’s inexperience in the spread-betting market. The FCA forced Plus500 to freeze all customer accounts earlier in the year as fears of money laundering loopholes were raised.
Needless to say the company went into freefall as Playtech were their big hope of a rescue. Plus500 were hoping to solve the issues raised by the FCA by December 31 but were informed by them that this was not feasible. The share price of Plus500 fell nearly 30p to 320p. The news is a double blow for Playtech who in light of the recent events are unlikely to succeed in acquiring Dublin based online spread betting firm AvaTrade which was already facing opposition from the Central Bank of Ireland.
Playtech have stated they are not conceding defeat just yet regarding the AvaTrade deal and intend to fight the CBI’s decision. Media sources have pointed a finger to the controversial founder of Playtech Tedi Sagi who did a stint in jail for stock fraud in the 1990’s in Israel. According to reports the FCA demanded that Sagi sell most of his 30.6 percent stake in Playtech as part of requirements for the Plus500 deal to go ahead.