06.12.2023

by Antoni Majewski

888 Holdings Declines Playtech’s $883 Million Acquisition Bid

888 Holdings, a major player in the online casino and sportsbook industry, recently made headlines by rejecting a substantial acquisition bid from Playtech PLC, a software development company renowned for its solutions in the iGaming sector.

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The bid, which was presented in the summer of 2023, amounted to a striking £700 million (approximately $883 million).

Playtech’s Offer and 888 Holdings’ Valuation

Playtech proposed acquiring 888 Holdings at 156p (around $1.97) per share, a valuation that would place the total worth of 888 Holdings at about £300 million ($379 million). This estimate led to the removal of 888 Holdings from the FTSE 250, an index comprising the 250 companies listed on the London Stock Exchange with the highest market capitalization. Playtech, also a member of the FTSE 250 and a significant presence in the US market, anticipated that the acquisition would elevate its ranking due to the increased capital.

Contrary to expectations, the rejection of this bid by 888 Holdings has led to an increase in its share price on the London Stock Exchange. The company’s shares have risen to 81p (approximately $1.02) per share since the announcement. This surge suggests a potential return of 888 Holdings to the FTSE 250 list, reflecting the market’s positive response to the company’s decision.

Previous Acquisition Attempts and Regulatory Scrutiny

This latest offer from Playtech followed an earlier acquisition bid from DraftKings, which was withdrawn due to an investigation by the UK Gambling Commission into a minor shareholder of 888 Holdings. Despite the withdrawal, 888 Holdings has maintained its significant presence in key US markets.

The decision to reject Playtech’s bid seems influenced by 888 Holdings’ previous $800 million acquisition of a Caesars Entertainment vertical outside the US in 2022, potentially increasing the company’s overall value. This recent increase in share price could position 888 Holdings to entertain more favorable acquisition offers in the future.

Our Comment on the Article

888 Holdings’ rejection of the $883 million acquisition bid by Playtech underscores a strategic move in the ever-competitive iGaming industry. This decision not only reflects the company’s confidence in its standalone value and growth potential but also signals a broader industry trend where major players are increasingly valuing autonomy and market positioning over immediate financial gains.

This move could set a precedent for how mergers and acquisitions are approached in the iGaming sector, highlighting the importance of strategic alignment and market valuation in these high-stake negotiations. As 888 Holdings eyes future opportunities, its current market performance will be a critical factor in shaping its trajectory in the dynamic world of online gaming and sports betting.

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