1 June, AtoZForex.com, Lagos – In recent times, Teddy Sagi and his company, Playtech have been linked with a number of potential high profile acquisitions in the FX brokerage industry. Unexpectedly, Plus500 is the firm to finally get swallowed by Playtech.
Plus500’s issues graduated from reports of a system overload a few weeks back, to reports of an on going scrutiny of its UK business activities by the FCA. The issue with the FCA was regarding operations involving implementation of certain enhanced client on boarding and Anti-Money Laundering processes. Plus500 was found wanting in carrying out proper procedure which led to the freezing of its UK client funds, and a panic dumping of its shares, leading to about 39% plunge in its share price in a day. Before the weekend, the latest report was that the company was trying to prompt its UK clients to move their accounts to the Cyprus operations.
It has now been reported that Playtech has stepped up with a bid to successfully acquire a controlling stake in the ailing Plus500. The agreement reached by the the board of the companies values the broker at 400 pence per share in cash. This puts the eventual valuation of the company at £459.6 million, which is almost half the value of the company about two weeks ago.
Playtech already acquired TradeFX, adding it to his LSE-listed company as he officially entered the retail forex market. After which there have been rumours of a likely deal to acquire Avatrade as well as a potential merger with IronFX.
Commenting on the announcement, CEO of Playtech, Mor Weizer, said, “Having recently completed the acquisition of TradeFX, the opportunity to acquire Plus500 will prove transformational for our ambitions to expand Playtech’s wider offering.”
“As an immediately earnings enhancing acquisition, the combination of the two businesses is compelling, enabling us to apply our market-leading products and services to the enlarged financial trading business as we continue to execute our growth strategy for the Group,” he added.
CEO of Plus500, Gal Haber, also stated that:, “Having been admitted to AIM at a share price of 115p on 24 July 2013 and paid significant dividends during this time, we believe that now is the right time to combine the business with Playtech who can provide additional infrastructure and expertise to add to our core skills in products, technology and marketing.”
As Playtech acquires Plus500, the management of Plus500 is expected to remain in control for a period of 12 months. The deal is expected to be completely sealed by the end of September 2015, subject to a regulatory and shareholder approval.