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LONDON BRIEFING: Playtech accepts GBP2 billion Australian takeover

(Alliance News) - Gambling software firm Playtech on Monday said it has agreed to a GBP2.1 ...

Alliance News 18 October, 2021 | 8:09AM
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(Alliance News) - Gambling software firm Playtech on Monday said it has agreed to a GBP2.1 billion takeover by Australia's Aristocrat Leisure.

The Playtech board has unanimously recommended the offer from Aristocrat, which manufactures gambling machines and casino management systems and also publishes mobile games.

Aristocrat's 680 pence per share offer is a 58% premium to Playtech's closing price on Friday. The offer values Playtech's equity at GBP2.1 billion. On an enterprise basis, meaning including debt, it values the FTSE 250 company at GBP2.7 billion.

Playtech shares leapt 57% to 672.50p early Monday.

The bid is "intended to be recommended unanimously by the board of Playtech".

Playtech Chair Brian Mattingley commented: "In recent years, Playtech has successfully repositioned its world-leading gambling technology and operations, expanding in strategically important regulated markets and driving major online B2B revenue growth. Whilst the business has made significant progress, most notably in the Americas, Aristocrat's proposal provides an attractive opportunity for shareholders to accelerate Playtech's longer-term value."

In late September, Playtech agreed to sell Finalto, its financial trading division, to investment vehicle and shareholder Gopher Investments for an enterprise value of USD250 million.

Sydney-listed Aristocrat has a market value of AUD29.24 billion, about GBP15.76 billion. It is a constituent of the ASX 20 index.

Aristocrat is based in North Ryde, near Sydney. Playtech was founded in Estonia, but now is based in Isle of Man.

"The proposed combination would bring together Aristocrat's world-class gaming content, customer and regulatory relationships with Playtech's industry-leading global online RMG platform B2B and European B2C footprint," explained Aristocrat CEO Trevor Croker. "The combined group would offer a broad portfolio of end-to-end solutions for gaming customers around the world, as well as seamless player experiences, underpinned by a shared focus on responsible gameplay and innovation."

Here is what you need to know at the London market open:

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MARKETS

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FTSE 100: down 0.1% at 7,224.61

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Hang Seng: down 0.4% at 25,224.75

Nikkei 225: closed down 0.2% at 29,025.46

DJIA: closed up 382.20 points, or 1.1%, at 35,294.76

S&P 500: closed up 33.11 points, or 0.8%, at 4,471.37

Nasdaq Composite: closed up 73.91 points, or 0.5%, at 14,897.34

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EUR: down at USD1.1577 (USD1.1603)

GBP: down at USD1.3736 (USD1.3780)

USD: up at JPY114.29 (JPY114.17)

GOLD: down at USD1,764.62 per ounce (USD1,773.75)

OIL (Brent): up at USD85.48 a barrel (USD84.73)

(changes since previous London equities close)

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ECONOMICS AND GENERAL

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Monday's Key Economic Events still to come

0915 EDT US industrial production

1000 EDT US NAHB housing market index

1600 EDT US Treasury international capital data

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UK house prices registered their most substantial October rise in six years, figures from property portal Rightmove showed, with all sectors and regions enjoying a bumper month. Rightmove labelled October as the first "full house" since March 2007, meaning price records were posted in all regions of the UK, as well as property market sectors. Price increases were seen in homes bought by first-time buyers as well as second-steppers, or those who are looking to move up the property ladder. For those at the top of ladder, prices also increased. Overall, UK house prices rose 1.8% monthly in October to GBP344,445. It is the largest rise at this time of the year since October 2015. Annually, prices were 6.5% higher.

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The number of UK businesses that registered as insolvent last month was the highest since the pandemic began. According to data from the Insolvency Service, there were 1,446 company insolvencies across England and Wales in September – up from 1,349 in August and 928 from the same time last year. The figures come after the Bank of England warned that higher borrowing during the pandemic had likely put more businesses at risk. "The increase in debt – though moderate in aggregate – has likely led to increases in the number and scale of more vulnerable businesses," it said.

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The Dublin government is not contemplating the re-imposition of Covid-19 restrictions in Ireland, the taoiseach said. Micheal Martin insisted the vaccine rollout had put Ireland in a different situation from earlier in the pandemic, despite rising infection rates. The 2,180 cases of coronavirus reported on Saturday was the highest number since January. While Martin has insisted new measures are not on the horizon, he has already cautioned that he cannot guarantee the lifting of the remaining restrictions will proceed as planned this coming Friday.

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BROKER RATING CHANGES

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JEFFERIES RAISES DRAX GROUP TO 'BUY' ('HOLD') - TARGET 660 (280) PENCE

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BARCLAYS RAISES C&C GROUP TO 'OVERWEIGHT' ('EQUAL W.') - TARGET 280 (240) PENCE

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COMPANIES - FTSE 100

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AstraZeneca advised shareholders to reject a 'mini-tender' offer by TRC Capital Investment for 2.0 million of Astra's American Depositary Shares, an about 0.1% stake in the company. The offer at USD57.88 is 4.5% below the price of the ADSs on October 8, the last day before the offer from the Toronto-based investor commenced, Astra noted. "AstraZeneca does not in any way recommend or endorse the TRC Capital offer and recommends that shareholders reject the offer because the offer price is below the market price for ADSs immediately prior to this announcement."

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Schroders said assets under management at September 30 totalled GBP716.9 billion, up 2.4% quarter-on-quarter from GBP700.4 billion. Numbers showed that in the third quarter, there was a 0.2% quarterly hike in assets held in its assets management division alone to GBP527.2 billion.

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National Grid said it is continuing to perform in line with expectations. It also expects underlying earnings per share this financial year to show a "marginally greater weighting" to the first half, which ended on September 30.

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Virgin Media O2 has launched its first joint product since being formed in a GBP31 billion merger earlier this year to take on BT Group. Customers of both brands can expect their pay monthly mobile data allowance to be doubled, while broadband speeds will be upgraded to the next available tier, free of charge. The firm is hoping its Volt offering will lure new customers who may only have one service but not the other, as well as those not currently using either. Bill payers who link their two accounts together from Monday will also have roaming in 75 countries added – usually GBP4.99 per day – access to WiFi Pods for better broadband coverage around the home, and money off new connected devices with a pay monthly plan.

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COMPANIES - FTSE 250

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Transport firms National Express and Stagecoach agreed to extend the deadline for National Express to make a takeover offer for its peer until November 16. "Discussions between the parties and reciprocal due diligence remain ongoing and there can be no certainty that an offer will be made," the companies said in parallel announcements.

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COMPANIES - MAIN MARKET AND AIM

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Manchester-based online retail platform THG is looking to rebuild investor confidence, after a disastrous capital markets day early last week resulted in a 34% share price slide and left analysts and investors with more questions than answers. Founder & CEO Matthew Moulding, "in furtherance of good corporate governance", plans to give up his golden share. The special share allows Moulding to veto any takeover bid for three years. It has been unpopular with investors and prevents THG from joining the FTSE 100 or FTSE 250 despite a market capitalisation of more than GBP3.50 billion. "This cancellation will facilitate the group's application to step-up to the premium segment of the Main Market of the London Stock Exchange in 2022," THG explained. "A premium listing will permit THG to gain UK FTSE indexation." Citing City sources, Sky News had reported on Sunday that THG, which trades as The Hut Group, was to announce plans to remove the special share rights. Moulding added on Monday: "After the anniversary of our 2020 listing we feel that the time is right to make this next step and apply to the premium segment in 2022, thereby continuing the development of THG as we endeavour to deliver our strategy for the benefit of our shareholders, key stakeholders and employees."

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COMPANIES - GLOBAL

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Some 500 automotive jobs will reportedly be saved on Merseyside after Ford Motor selected Halewood to help realise its plan to sell only electric cars in the UK and Europe by 2030. The US manufacturer announced in February all of its cars and vans would have an electric or plug-in hybrid option by mid-2024, before its cars go pure electric by the end of the decade. The firm will spend GBP230 million converting its factory in Halewood, Liverpool, which currently makes transmissions, to start producing up to 250,000 electric power units per year from 2024, according to The Times. The decision was reached after the UK government made some GBP30 million available to firms through the Automotive Transformation Fund, the newspaper added.

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From Monday, four Scandinavian airlines will no longer require travellers flying within Denmark, Norway and Sweden to wear masks on board their aircraft. SAS, Norwegian, Wideroe and Flyr are due to lift their strict mask mandate, as vaccination rates in Scandinavia are some of the highest in the world. "The Norwegian infection control guide no longer requires domestic passengers to wear face masks, so this requirement will no longer apply on board Wideroe's flights," spokeswoman Silje Brandvoll told Norwegian Radio. However, she said, masks must still be worn on flights to countries outside the region.

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Monday's Shareholder Meetings

City of London Investment Group PLC - AGM

M&C Saatchi PLC - AGM

Novacyt SA - AGM

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By Tom Waite; thomaslwaite@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
C&C Group PLC 234.00 -
Drax Group PLC 584.00 -
AstraZeneca PLC 8,363.00
Playtech PLC 718.00 -
National Express Group PLC 233.40 -
Stagecoach Group PLC 75.00 -
Aristocrat Leisure Ltd 44.52

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