Playtech offloads entire stake in Plus500

Playtech has sold its stake in Plus500, the online financial trading platform. Playtech owned a 10% stake of Plus500 which it has sold in full for around £176m.

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Playtech has sold its 10% share in Plus500 for £176m. © Pexels.

The move was announced in a trading update and Playtech has said that the funds will be used to reduce debt and put towards other general corporate purposes.

The sale consists of 11.4m ordinary shares at 1.550p per share. Shares in Playtech fell by 5.3% immediately after the news.

The sale comes at a challenging time for Playtech as it looks to refinance almost $1.6bn of debt to purchase Italian gaming group Snaitech.

Last week, numerous UK media outlets reported that a hedge fund, SpringOwl, who own a 5% stake in the group, would be pushing for asset disposals.

This week, another hedge fund has started to ramp up the pressure on Playtech management. Odey Asset Management, owned by Crispin Odey, own a 5% stake in Playtech and this week The Times reported that Odey would also pushing for asset disposals from Playtech.

The Times claims that both hedge groups have been in contact.

Two profit warnings issued in the last year

This news follows two profit warnings made by Playtech in the last year. The second, issued in July due largely to a disappointing performance in Asia, followed an initial warning made in November of 2017.

That profit warning caused the share price to tumble by a massive 22% but the second sent the share price falling even futher, by 26% immediately following the update in July of this year.

Playtech made an ultimately doomed attempt to acquire Plus500 back in 2015. That deal was worth around $700m but failed to get approval from the Financial Conduct Authority and the Bank of Ireland. That lead to Playtech investing as a shareholder, purchasing a 10% stake.

Share prices did rise in Playtech in August on the back of improved first half (H1) performance. Revenues rose 4% and Snaitech contributed revenue of its own to help offset the troubles in Asia. However, revenues from the gaming division fell by 16%.

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