LONDON: Plus500 Ltd. agreed to a $703 million bid from Playtech Plc, two weeks after the trading platform froze customer accounts, its stock plunged and short-sellers began circling. Playtech reserved the right to walk away if needed.
Playtech, an online gambling company that’s expanding into trading, said Monday it would pay 400 pence a share for Plus500, about 55 percent of its value a month ago. The deal can be scrapped if Plus500’s business falters, Mor Weizer, chief executive officer of Playtech, said on a call with investors.
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The U.K. Financial Conduct Authority ordered Israel-based Plus500 to freeze the accounts in May as part of a review into anti-money-laundering controls that started in January. The company’s difficulties attracted firms like Valiant Capital Management betting on further declines, while billionaire Crispin Odey increased his stake after the shares plunged.
“We wanted to act quickly,” Weizer said on the call. “We see an opportunity. We believe that by combining the two, we will remedy the situation. There are certain scenarios defined in the agreement that for certain material adverse change affecting the business, the transaction basically becomes void.”
Plus500 jumped as much as 8.9 percent before erasing much of that gain after Weizer’s comments, while Douglas, Isle of Man-based Playtech pared a loss. Weizer said more details on the “adverse change” scenarios would be published in a forthcoming shareholder circular.
Plus500 was 0.9 percent higher at 373.25 pence as of 12:26 p.m. in London, giving the company a market value of 428 million pounds ($651 million). The bid is valued at about 460 million pounds. Playtech dropped 1.3 percent to 819.5 pence.
