23 November, AtoZForex.com, Amsterdam — Playtech faces another blow before the end of the day, as the shareholders of AvaTrade Ltd. (AvaTrade) have cancelled the share purchase agreement relating to the takeover. Marking, a disastrous day for the gaming giant Playtech (LON:PTEC), considering that earlier today AtoZ reported that the acquisition of Plus500 has been called off.
The underlying reason for such a drastic decision, came after Playtech discovered that it is not able to take the steps to satisfy the FCA, for completion of the acquisition. Hence, the gaming giant withdrew its change of control application to the FCA. Thereby, Playtech officially terminated the proceedings of acquiring Plus500.
AvaTrade triggered the termination right
Earlier today, the announcement of Playtech on the termination of the Plus500 acquisition, also provided insights on the takeover of AvaTrade. The update on the AvaTrade acquisition, clarified that the gaming giant was afraid of the increased risk of AvaTrade to trigger its right to terminate the acquisition.
Considering that the broker AvaTrade falls under the regulating jurisdiction of the CBI. AvaTrade obtained this termination right, only after the Central Bank of Ireland started to oppose the Playtech AvaTrade agreement in October 2015. Ever since, the gaming giant has taken its effort to formally challenge the bank.
Nevertheless, AvaTrade has not exercised the Termination right over the deal. Until today, Playtech has released an announcement that indicates the broker’s decision to terminate the share purchase agreement, which is relating the acquisition.
Is the Playtech AvaTrade acquisition cancelled?
The statement of Playtech only indicated that the share purchase agreement got terminated, in fact it does not indicate that the acquisition of AvaTrade is off the table. Especially, now that Playtech reported to continue its effort to appeal the Central Bank of Ireland decision of opposing the acquisition application.
In case of an eventual exit of acquisition, the gaming giant has stated that it will only incur the loss of $5 million, which depicts the non-refundable deposit to AvaTrade on the signing of the acquisition with the broker. No other financial costs or penalties are expected to be incurred by Playtech.
Stay tuned with AtoZ Forex for the latest news upon the disastrous case of Playtech. Will the gaming giant be able to save the AvaTrade acquisition?