Playtech Walks Away from Plus500 Acquisition

The software developer Playtech is one of the biggest names in the gambling industry. Playtech has produced a number of truly incredible game for some of the biggest and most successful online casinos in the world. Playtech recently made waves about possibly acquiring the contracts-for-difference broker Plus500.

Based on these reports, it appeared Playtech was looking to expand its sphere of influence and presence in the industry. All of that seems to be on hold now as the plans are being dropped. The Financial Conduct Authority (FCA) of the U.K. has made some noises over disapproval of the deal. Playtech has now opted to bail out.

The deal was assuredly not a minor one. The purchase offer was in the £460 million range. Playtech was working with the FCA to put the deal through. The FCA had several concerns over the deal and tries to work at negotiating the completion of the deal. Both parties were apart from one another on a host of issues. This should not be considered anything really out of the ordinary or controversial. Negotiations and discussions about such deals are commonplace. Sometimes, things work out. Other times, they just do not.

In this case, the FCA simply had too many problems with the merger and could not resolve the matter with Playtech. Playtech has decided to drop all further attempts at acquiring the company. Basically, Playtech is walking away from the deal.

The FCA had laid down terms for Playtech to meet and the terms had to be met by December 31st. Playtech was not interested in meeting these terms and, again, has walked.

The process actually started in Cyprus. The Cyprus Securities Exchange Commission had given the “thumbs up” to the move and approved Playtech’s plans to move forward. Things did change once the project moved to the United Kingdom. Had issues with the FCA been cleared up, then things could have moved forward to their completion. As previously mentioned, things went far from smooth with the FCA. Now the deal is, for lack of a better description, a dead one. Concerns over Plus 500’s need to perform identity confirmation and risks for money laundering weighed on the minds of the regulators at the FCA.

Interestingly, there will be no sanctions levied against Playtech. Assumptions were that the FCA would fine Playtech as a result of the company’s walking away from. This turned out not to be the case.

Currently, Playtech holds 9.9% stake in Plus500. Whether or not the company will hold onto its stake or put all or some up for sale remains to be seen. All will be revealed in time, but things appear Playtech is interested in not making any waves right now.

Playtech also has a deal in the works to acquire AvaTrade. Is this deal going to fall through, too?