Playtech to Raise £100m Through Share Placement

Large online gaming software vendor Playtech has announced it is seeking to raise £100 million through an underwritten share placement, after placing a little more than 46.5 million shares at £2.15 each with Brickington Trading Limited.

The gambling software giant has reportedly made the move to help facilitate investments in new joint ventures and finance acquisitions going forward. Although Brickington, a leading investment firm in the UK, is Playtech's biggest investor, 27.7 million of the shares will be available for placing with institutional shareholders via 'clawback'.

Brickington currently holds a 40.3 percent stake in Playtech, and has agreed to underwrite the total share placement, which could see its overall stake in the company increase to as much as 49.9 percent, provided institutional investors do not buy all of the available 27.7 million shares.

The 46.5 million Playtech share placement represents just 19 percent of Playtech's overall issued share capital, and is expected to increase the firm's share capital to 289,209,348 when all is said and done.

Said Playtech CEO Mor Weizer, 'After consultation with our major institutional shareholders, I am delighted with the support we have been given. On the basis that the placing is approved by shareholders, these funds will deliver us immediate firepower for the strategic acquisitions and joint ventures we see before us.'

Share Placement Will Take Playtech to Next Level

'As part of this exercise, the board has re-confirmed its commitment to move to the main market and announced a revised dividend policy. We continue to enjoy strong current trading and, when taken all together, these actions will take Playtech to the next level,' he said.

The share placement by Playtech is not unexpected, because when it published its half-year results (ending 30 June, 2011) it revealed that it was actively looking at a host of strategic mergers, acquisitions and partnerships. To this end, Playtech is pursuing strategic joint ventures as well as 'bolt-on acquisitions' with non-related third parties.

These joint ventures - aimed at creating long term symbiotic partnerships - will likely entail Playtech and its partners investing between €15 million and €30 million, most of which will be earmarked for marketing activities. Playtech will also earn substantial royalties via revenue share of its software, with said joint ventures.