Month: January 2022

Australian slot machine manufacturer Aristocrat in October 2021 agreed to acquire Playtech in a deal worth approximately £2.70bn (€3.23bn/$3.65bn), with court and general meetings associated with the offer due to take place on 12 January.

However, this has now been pushed back to 2 February so that JKO Play has more time to develop the terms of a potential takeover offer for the gambling tech giant.

JKO Play must clarify its position and state whether it will place a bid by 5pm on 26 January.

JKO Play, a business controlled by former Formula 1 team owner Eddie Jordan and industry veteran Keith O’Loughlin, emerged as a potential bidder for Playtech in November 2021. 

Though it is yet table an offer, JKO Play has been provided with due diligence information and has continued to engage with Playtech since making its initial approach in November.

Playtech said these discussions are progressing and, as such, JKO Play has asked that it be provided with more time to develop a potential takeover offer.

JKO Play had initially been given until 5 January to submit a firm bid for Playtech – a deadline agreed by both parties, as well as Aristocrat. However, this date has now been pushed back, to the day of the rescheduled meeting.

“Given the circumstances, the board consider it to be in Playtech shareholders’ interests to adjourn the court meeting and general meeting required to implement the Aristocrat offer, due to be held on 12 January, and to set a revised deadline, aligned to the new date for the adjourned shareholder meetings, by which JKO must clarify its intentions in relation to Playtech,” Playtech said.

However, Playtech also said that despite any adjournment of the court and general meeting, there is no certainty that JKO Play’s approach will result in an offer, nor any certainty of the terms on which any offer might be made.

Playtech added its directors continue to recommend unanimously that shareholders vote in favour of the Aristocrat offer, saying it would provide “certainty and liquidity”.

Responding to the delay, Aristocrat reiterated that its offer is the only firm bid on the table and provides “attractive value in cash and enhanced regulatory and financial certainty for Playtech shareholders”.

“Aristocrat further notes that any other potential bidders have already had a substantial amount of time to make an alternative proposal for Playtech,” Aristocrat said. “The decision to further delay the relevant shareholder meetings extends the period of uncertainty for all Playtech stakeholders.”

It was initially hoped that a takeover deal would complete during the second quarter of 2022.

In December last year, Playtech shareholders approved the sale of its financial trading division Finalto to Gopher Investments, a key step that was required for Aristocrat’s deal to take effect.

Gopher had previously also expressed an interest in acquiring Playtech, but withdrew from the running two weeks later.

Sainsbury replaces fellow co-founder David Briggs, who served as chief executive for four years between 2018 and 2021, a period in which GeoComply saw its revenue increase by more than 1,500%.

Briggs will now assume a director role, with a special focus on strategic initiatives including the expansion of GeoComply’s cybersecurity services into new markets.

Sainsbury was previously CEO of GeoComply for seven years, after helping to launch the business in 2011.

Read the full story on iGB North America.

In July last year, Scientific Games put forward a proposal to purchase all SciPlay shares that it did not own. 

The agreement had an implied enterprise value of $1.90bn and would have seen SciPlay shareholders, other than SGC, receive 0.25 shares of Scientific Games stock for each share of SciPlay stock.

However, the decision to withdraw the proposal will see SGC retain its 81% economic interest and 98% voting interest in SciPlay.

SciPlay was previously the social division within Scientific Games until becoming an independent business, trading on the Nasdaq Stock Exchange, in 2019.

“In line with our approach to capital management and disciplined M&A we have decided that continuing to pursue this opportunity would not be prudent for our shareholders at this time,” SGC president and chief executive Barry Cottle said. 

“We remain committed to our strategy of leveraging our unparalleled portfolio of hit franchises, world-class talent and premium content engine to develop great games fully cross-platform. 

“SciPlay remains a strategic asset and has the opportunity to drive meaningful value as it grows its social casino market share and expands into the $20bn casual genre leveraging its expertise in engagement and monetization. 

“We will continue to invest in this sector in a disciplined manner. Importantly, as we advance our strategy, we will continue to take a holistic approach to capital management as we focus on allocating capital to drive growth in earnings per share.”

The move follows a host of M&A activity at SGC in recent months, including the acquisition of Swedish games developer Elk Studios last month and casino solutions provider Authentic Gaming in November 2021, the latter of which signified the company’s first foray into the live casino market.

In October last year, SGC also entered into a definitive agreement to sell its lottery business to private equity company Brookfield Business Partners for $6.05bn. Its sports betting division, meanwhile, it set to be sold to IMG Arena owner Endeavor.

SGC said proceeds from the lottery division sale will enable it to drive improved shareholder returns through significantly de-levering its balance sheet, investing in the core business and targeting accretive digital M&A to accelerate its growth strategies.

Court documents filed in response to the operator being granted a temporary restraining order against Mintas in December claim that the proposed $450m deal was torpedoed due to the actions of PlayUp CEO Daniel Simic. 

This contradicts the operator’s claims that it was Mintas, as a result of failed negotiations to extend her contract, that resulted in the deal collapsing and prompting it to file for a restraining order. Mintas had already spoken out to deny the allegations, ahead of filing her legal response.

The memorandum outlining her opposition to the restraining order explains that Simic, in November last year, sought to add additional conditions to the proposed $450m acquisition.

He attempted to have FTX acquire PlayChip, a decentralised utility token designed for the betting and gaming sector, for an additional $105m, and a further $65m incentive for Australian “key staff” including $25m for Simic himself. 

PlayChip, Mintas’ filing noted, was controlled by PlayUp’s Australian board members, Simic, Michael Costa and Richard Sapsford. She claims that upon raising concerns about these conditions, she was frozen out of the business then accused of sabotaging the deal.

In an email from FTX, which outlined why the deal would not go through, it highlighted the importance of the US business, and expressed concern that key US personnel – such as Mintas – would not be retained. 

It also noted a mistrust and lack of communication between the management of the parent company in Australia and the US business. In addition, FTX said PlayChip caused conflicts of interest for the management team, which could have legal ramifications. 

“In short, FTX did not pass on the deal because Dr. Mintas disparaged PlayUp but because Simic made unreasonable and unethical demands,” the filing stated. 

Mintas attempted to salvage the sale, which would have led to Simic’s removal as CEO. At one point he did offer to resign, but only in return for a $10m severance package. Her recommendation that he step down, she said, was “not disparagement but expertise”.

While PlayUp’s filling for the temporary restraining order claimed Mintas had threatened to “burn [the business] to the ground” after contract negotiations collapsed, her response claims this was not the case. Instead, she claims she was repeatedly told a new contract was being drafted. 

The company, she argued, made false claims about the renewal, including increasing her annual salary to $1m and increasing her stake in the business to 15%. 

However, before the expiry of her original contact on 30 November 2021, the operator filed suit in the US District Court of Nevada, “tarnishing [her] reputation and destroying all of her hard work”.

Upon joining the business in December 2019, she claims Simic made multiple false statements about the business. He claimed that PlayUp was poised to launch an initial public offering in the US, and that it owned a proprietary technology platform. Its third party solution was then misrepresented as an in-house product. 

She noted that her contract was later amended to give her an equity interest in the business, after she went unpaid for the first year of her tenure. For her second year she was paid an annual salary of $500,000 – something Mintas noted was half the going market rate – and her 11% stake was diluted to 7.5%. 

She invested $1.2m of her own funds into the business, and argued by securing nine market access agreements, with a further ten pending when access to her PlayUp email was shut off, she had “far exceeded” contractual requirements.

Simic allegedly told newly appointed chair Dennis Drazin (an appointment supported by Mintas) that the suit was the result of bad legal advice, with Drazin advising against pursuing court proceedings.

Mintas claims to have been taken by surprise by the suit, discovering the temporary restraining order and allegations she killed the FTX deal through the press. As a result, she said, her life has been “put on hold”. 

A headhunter told her there was “no way for her to get hired” under the circumstances, her family’s move to the Bahamas had been postponed as a result of the case. 

Even after the suit was filed, PlayUp continued to engage with her, leading Mintas to believe her contract would be extended and there would be an opportunity to salvage the FTX deal. Instead, she was informed on 22 December that her roles as US CEO and director of the business had ceased.

She argued that far from breaching any fiduciary duties, she fought to prevent PlayUp’s management from putting personal interests above their duties to the business. Having invested her own money in the business, she had “no motivation” to sabotage the deal, she added. 

As such, her filing argues, PlayUp’s lawsuit is “a mere ploy”. Otherwise there would be no reason to work and negotiate with her after making its filing. Either the business was making misrepresentations over her contract, or intending to renew it despite the court case. 

“Neither situation paints a credible picture of the leadership of PlayUp,” it states. 

Mintas has requested the submission for a restraining order be rejected by the court. The next hearing is due to take place early next week.