Odey Asset Management, the second largest shareholder in financial spread betting firm Plus500, says it would vote against Playtech’s proposed £460m acquisition bid.
London-based hedge fund Odey Asset Management, which has increased its stake in Plus500 from 13% to 25% over the past three weeks, said Playtech’s proposed 400p per share offer is an “opportunistic bid exploiting current regulatory issues and risks.”
“In our view, 400p materially undervalues Plus500 and we do not intend to vote in favour of the cash acquisition of Plus500 at this price,” said Odey Asset Management in a statement. “Even considering the current regulatory issues and near term risks, we believe the intrinsic value of the business on a longer term view is materially higher than 400p.”
“We understand that this cash acquisition may make sense for Plus500’s management and staff, whom we expect could be further incentivized by Playtech after the acquisition has completed. However, for independent shareholders we believe the current offer represents too great a discount compared to intrinsic valuation as a standalone entity,” added Odey Asset.
A Playtech spokesperson told Business Insider last week that Odey Asset Management’s arguments are weak and not categorical.
“Our 400p per share offer remains compelling for Plus500 shareholders as it offers a clean cash exit at a significant premium to both the initial issue price and prevailing market value prior to our proposed offer,” added Playtech’s spokesperson.
Meanwhile, Plus500’s management, who hold 35% of the company’s stock, have already approved Playtech’s bid, calling the terms “fair and reasonable.”
Playtech’s bid prices the Israel-based CFDs trading platform at 400p per share and requires approval from the UK’s Financial Conduct Authority.