Good morning, TTB Partners will not be making a bid for Playtech due to unfavourable market conditions.

• Both parties said they supported each other’s efforts to drive Playtech to further growth.

• The news leaves Playtech with a number of options, notably in North and South America.

• Playtech continued to simplify its corporate structure this week as it finalized the sale of Finalto to Gopher Investments for $250m

TTB Partners ends bid for Playtech

No deal: TTB Partners will not be making an offer for Playtech “due to challenging underlying market conditions”, but the consortium remains supportive of the group’s prospects and will support its efforts “to maximise shareholder value”.

Strong H1: In response, Playtech said it remained “very confident about the positive long term prospects for the group” and expects H122 adjusted EBITDA of more than €200m. 

• Analysts at Peel Hunt noted the group’s “remarkably strong trading continued through H122”. 

• The adjusted EBITDA figures implied “an upgrade in excess of more than 10% to our FY22E forecast”.

Americas momentum: Playtech’s strong performance was driven by both its B2B and B2C units, with “very strong momentum from the Americas” and live casino for B2B.

• On the consumer side, “Snaitech had an excellent first half driven by its online business, retail recovery and favourable sports results”. 

Forward focus: With the TTB saga now closed, the focus is likely to fall on its CaliPlay joint venture with Mexico’s Caliente group.

• Caliente is the group’s largest B2B customer.

• Playtech’s 39% stake in CaliPlay is believed to be worth around £700m.

• This has led to rumors that it could carry out a US float via a SPAC merger with the UK investment group Tekkorp Digital, enabling it to  enter the US market on an accelerated basis.

End roll: The news brings an end to the protracted Playtech takeover saga, “for now”, Peel Hunt said. 

• Recall, TTB is led by ex-Playtech CEO Tom Hall and includes current CEO Mor Weizer among its bid team.

• In Oct21 Australian slot machine manufacturer Aristocrat made a 680p per share, $2.7bn bid for Playtech which was accepted by the board. 

• This was followed by a flurry of investors buying up Playtech stock at over 700p per share, “prompting initial suspicions about a conspiracy against its bid”, according to the FT.

Share price reaction

The news did not have a positive impact on Playtech shares, they were down 16.6% in early trading.

Calendar

• Jul 21: Betsson Q2, Evolution Q2

• Jul 22: Kindred Q2

• Jul 26: Boyd Gaming Q2

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