Playtech terminates $700 million deal for Plus500

Gambling technology company Playtech Plc (PTEC.L), received another regulatory jolt, this time in Britain, forcing it to abandon its $700 million deal to buy retail forex trading shop Plus500 Ltd (PLUSP.L).

The move comes more than a month after Playtech said it would challenge the Irish central bank's (CBI) decision to oppose its $105 million deal for currency trading platform Ava Trade Ltd. But it did not say what the issues were.



Playtech, which has been on an acquisition spree this year, said on Monday it was terminating the agreement to buy Plus500 as the deal was unlikely to obtain approval from the UK's Financial Conduct Authority by December end.

Shares in Playtech, founded by Israeli billionaire Teddy Sagi, fell as much as 12.3 per cent in early trading, while those of Plus500 sank as much as 22 per cent.

Playtech had announced four acquisitions since the beginning of the year worth about $1.3 billion.

The company had agreed to buy Plus500 in June to expand its online trading platform.

Playtech said that following an update from the FCA on Friday, it was of the view that the steps being proposed to address certain concerns would not sufficiently satisfy the regulator to enable it to obtain approval by Dec. 31.

Playtech did not mention what concerns were raised by the FCA.

The company said it would not incur any financial penalties with respect to the termination and that it had no immediate plans related to its existing 9.9 per cent holding in Plus500.

However, the termination raises concerns about Playtech's Ava Trade deal. The CBI's opposition to the deal had triggered a termination right for Ava Trade's sellers.



Playtech said on Monday that although the sellers had not yet exercised this right, the termination of the Plus500 deal increased the risk that they may do so.

Playtech shares were down 8.6 per cent at 778 pence at 0950 GMT. Plus500 shares recovered most of their early losses to trade about 2.5 per cent lower at 349.50 pence.