Playtech terminates Plus500 acquisition

23 November,, Lagos – Playtech’s impending acquisition of FX brokers Plus500 and Avatrade became one of the industry’s biggest news of 2015. However, at this present moment, the possibility of any these deals pulling through now looks gloomy, as recent news points that the board of Playtech have decided to terminate the plus500 acquisition prospect.

The acquisition deal of Plus500 initially hit a road block in the UK’s Financial Conduct Authority’s refusal to permit the completion of the deal. Although, a regulatory approval for the acquisition had already been received from the Cyprus Securities Exchange Commission. The UK regulator raised certain concerns, which Playtech hoped will be resolved satisfactorily before 31st of December, 2015, being the effective long-stop date for the transaction to complete.

Why Playtech decides to withdraw

However, following an update from the FCA on Friday, November 20th , 2015, Playtech has decided that the necessary steps intended to be taken will not be sufficient to satisfy the UK regulator. This will inhibit the completion of the acquisition deal by stipulated date of 31st of December, 2015. Therefore, the board of Playtech decided to withdraw its change of control application to the FCA.

According to the announcement of the gaming giant, Playtech has discussed with Plus500 upon the FCA consequences of last Friday, which resulted in an agreement of terminating the merger agreement. To conclude, the Playtech Plus500 acquisition will not be proceeded anymore.

Plus500 remains a growing company

As Playtech terminates Plus500 acquisition prospect, Plus500’s Chief Executive Officer Gal Haber commented:

Following the agreement with Playtech that the merger between the companies will not proceed, we can confirm that our business is in good shape for a successful future as an independent company.

Plus500 remains a growing, highly profitable and cash generative company with strong momentum in an expanding international market. We have adopted a “business as usual” policy during the lengthy acquisition timetable and continued to invest in our marketing, technology and regulatory operations during this period. As a result, we are very confident that as an independent business we are well positioned to continue to deliver significant returns for shareholders, including the declaration today of an intended interim dividend of $0.2121 per share and share buyback programme.”

The Israeli based FX and CFDs broker also clarified forward looking plans, declaring interim dividend, and shares buy back among other plans.

Market reaction

The markets did not receive the news with positivity as Playtech stocks dipped 9.34 per cent to $11.7 and the shares of AIM-listed Plus500 also lost 9.9 per cent to $4.89.

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