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Plus500 key shareholder opposed to Playtech acquisition

10 June 2015

Online gaming software company and service provider Playtech, have recently announced that they will be acquiring the entire share capital of Plus500 in a confirmed acquisition valued at $702 million dollars. Plus500 is a well-established financial company who provides online trading services to retail customers and offers contracts for difference (CFD) on a range of financial markets. Playtech’s deal offering will be at $6 dollars per share. This proposed takeover bid of Plus500 has now come under heavy scrutiny by the Plus500’s largest shareholder, Odey Asset Management as they oppose the bid.

It has now emerged that Odey Asset Management, which holds a 25% stake in Plus500, is oppose to any bid, as they reveal that the current Playtech offer materially undervalues Plus500. The Playtech offer unveiled recently, valued the London Stock Exchange (AIM) quoted company at $6 dollar share, 8.1% above Plus500 $5.66 dollar closing price last Friday but well below the $11.47 dollars it was trading at the middle of May 2015.

Playtech made its first venture into the trading market buying TradeFX in a $500 million dollar deal. Playtech firmly believes that the trading platform is complementary to gaming companies operations. Having virtually all the online gaming platform offering creations , products and services in place, diversifying into a stronger global market surely makes Playtech the world’s largest online gaming software company. With its wide market reach, product offering, advance technology and existing relations with clients globally, it sure is an agreement with a unique sense of business opportunity for Playtech. However shareholder Odey Asset Management says the bid is opportunistic and exploits current regulatory issues.

In a regulatory statement, the hedge fund giant Odey Asset Management, commented saying: “In our view $6 dollar share materially undervalues Plus500 and we do not intend to vote in favour 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 $6 dollar share. 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.”

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