Playtech’s current and former chief executive have accused Australian gambling company Aristocrat Leisure and its advisers of orchestrating a campaign to protect its bid for the UK gaming group by creating suspicions around a cabal of Asian investors.
The allegation breaks a silence maintained by Playtech’s former head, Tom Hall, since October and the start of one of the UK’s most heated takeover battles of recent times.
In January, media reports emerged which speculated that a group of investors based in Asia and supposedly corralled by “Hong Kong Tom” – a nickname sometimes applied to Hall – were acting in concert to block Aristocrat’s £ 2.7bn bid for Playtech.
Those allegations were based on a report compiled by a private investigations company and prompted an inquiry by the UK’s Takeover Panel into the contested process.
But Hall, Playtech’s chief executive from 2003 to 2005 and a resident of Hong Kong since 1989, said accusations that he had acted as a conduit to a party of Asian shareholders were “rubbish” and that discussions with the Takeover Panel revealed that key details with which it had been presented were false.
“As I explained to the Takeover Panel, I said I had never heard of, spoken to these people or their advisers,” Hall told the Financial Times, referring to some of the names on the list of Asia-based investors. Other information received by the panel, including the timing of Hall’s purchase of Playtech stock, was also incorrect, he said.
Mor Weizer, Playtech’s current chief executive, affirmed that opposition to Aristocrat’s offer, voted down in February by 45 per cent of shareholders, also came from “other UK-based tier one institutions, certain former employees of the company including certain people that are still involved with the company ”who believed that the Aristocrat offer was too low.
Playtech, which provides back-end software to some of the world’s largest gambling companies, had for a long time languished on the sidelines as consolidation swept across the betting industry, as operators adapt to tighter regulation in established markets and the opening up of the US and Latin America following moves to legalize wagering.
In October, however, the offer from Aristocrat, which manufactures slot machines, prompted two separate expressions of interest from an affiliate of Playtech’s second-largest shareholder TTB Partners and former Formula One boss Eddie Jordan.
Soon after the 680p per share Aristocrat offer was accepted by the board, a flurry of investors bought Playtech stock at over 700p per share prompting initial suspicions about a conspiracy against its bid.
Those who bought or increased their stakes included Paul Suen, the Chinese businessman known for floating Birmingham City Football Club and former Wigan Athletic owner Stanley Choi but also Dublin and Isle of Man-based investors, according to regulatory filings.
The report listed “key connections” between various Hong Kong-based investors and accused some of a “proximity to organized crime”, according to an edited version seen by the Financial Times.
Aristocrat declined to comment.
Hall, now working on a management buyout of Playtech with Weizer backed by TTB, said he outlined his transactions in Playtech shares going back three years and any contact he had with other Playtech shareholders to the Takeover Panel during several calls.
Hall owns 1.34 per cent of the business, he said.
A person with knowledge of the Takeover Panel’s deliberations said that the body did not deem that any investors with a Hong Kong address were working in concert.
Hall stepped back from running gambling firms in December 2020 to focus on sports media, but has continued to invest in gaming companies and said he did not agree with Aristocrat or Jordan’s vehicle JKO Play’s intentions to break up Playtech by reviewing its operations in Asia or selling its Italian retail arm Snaitech.
After the Aristocrat bid failed, Hall opened discussions with TTB, which withdrew its initial interest in November.
He asked Weizer to join the bid in mid-February to smooth Playtech’s entry into the US market, where states have been rapidly introducing legal gambling since the repeal of a federal ban on the practice in 2018. Weizer is personally licensed in several US states and led Playtech’s recent launches in Michigan and New Jersey.
The Playtech boss said that if their bid failed he risked having to resign from the company after 17 years. “I understand the consequences and I understand they are also quite dire if it does not happen but. . . at least I tried to do what is best for everyone involved. ”
The pair, backed by TTB and two large financial institutions in the UK and US, said they plan to submit a higher offer than Aristocrat’s to the Playtech board “shortly”.
Taking the company private would save Weizer from the scrutiny he has faced in recent years, particularly over the level of his pay, which has been subject to several shareholder rebellions.