Plus500 Shareholders Oppose Deal With Playtech
As we reported Playtech are looking to acquire UK trading platform Plus500 for a bargain price. As mentioned due to scrutiny by the UK Financial Conduct Authority the share price of Pus500 tanked by two thirds in recent weeks. This led to Playtech swooping in with a bid which some perceive as taking advantage of a temporary share price drop which would likely recover as soon as regulatory issues are resolved.
One of the main disgruntled parties to the proposed deal are Odey Asset Management who hold a 25% stake in Plus500. They have come out against the deal as they believe the current offer on the table “materially undervalues” the company.
Odey Asset management said in a statement,” In our view 400p materially undervalues Plus500 and we do not intend to vote in favor of the cash acquisition of Plus500 at this price. Even considering the current regulatory issues and near term risks, we believe the intrinsic value of the business on a longer term view is materially higher than 400p. We welcome Plus500 management’s approach to Playtech’s proposed cash acquisition, which allows other potential bidders the opportunity to appraise Plus500 with the same information as Playtech, and which allows management to cease its commitment to Playtech’s proposed cash acquisition should another bidder present a higher offer.”
In response Playtech dubbed Odey’s arguments as “weak and not categorical.” They went on to state,” Our 400p per share offer remains compelling for Plus 500 shareholders as it offers a clean cash exit at a significant premium to both the initial issue price and prevailing market value prior to our proposed offer.”