Israeli gambling technology provider Playtech has raised 297 million euros ($369 million) in a debut sale of convertible notes which were issued in order to raise funds for potential corporate acquisitions. The bonds were issued after the company’s stock took a tumble because of the new acquisition talk.
The Bonds, which will mature in November 2019, will be issued at par and are expected to carry a 0.5% annual coupon rate. The Bonds will be convertible into fully paid ordinary shares of the. The initial conversion price is expected to be set at a premium of between 25 – 30% to the volume weighted average price of the Ordinary Shares on the London Stock
The conversion price will be subject to customary adjustments pursuant to the terms and conditions of the Bonds. The Ordinary Shares underlying the Bonds represent approximately 9.99% of the Company’s issued share capital immediately prior to the Offering.
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“The market will be very pleased to see this deal, ” Nick Nugent, managing partner at brokerage KNG Securities LLP in London told Bloomberg. “People have cash to spend on convertibles.”
But apparently not all of the company’s stockholders were happy with the news. Its shares, which are offered on London’s FTSE, plummeted 7% as anxious investors exited after Credit Suisse downgraded it from neutral to underperform. This was due to reports that the Malaysian government was planning stricter controls on online gaming.
Credit Suisse was also not impressed with all the acquisition talk stating: “Focus on M&A [is] not necessarily aligned with shareholder interests. With the shares having de-rated 25% over the past 12 months, we believe that management would have commenced a share buyback if their interests were truly aligned with those of the shareholders.“
Playtech develops unified software platforms and content for the online and land-based gaming industry, together with providing a range of ancillary services such as marketing, CRM services and hosting.
The Company’s capabilities enable the delivery of an integrated software or turnkey solution, with players accessing online, broadcast, mobile and server-based gaming terminals through a single account.
Founded in 1999, Playtech is listed on the London Stock Exchange and has more than 3, 600 employees located in twelve countries. Its leading gaming applications include casino, bingo, poker, sports betting, live, mobile and social gaming, casual and fixed odds games.