Playtech finally closes doors on plans to buy Ava Trade

Playtech finally closes doors on plans buy Ava Trade

Online gambling technology provider Playtech is finally closing the Ava Trade acquisition chapter, months after it announced plans to buy the contracts-for-difference broker.

PlaytechPlaytech finally closes doors on plans buy Ava Trade announced on Tuesday that it is withdrawing its application to buy Ava Trade in light of the opposition from the Central Bank of Ireland. In a statement, Playtech said the Irish Financial Services Appeals Tribunal allowed—with CBI’s consent—the company to appeal against the central bank’s decision on grounds of error in the central bank’s decision-making process.

“However, although the application was referred back to the CBI for further consideration, as the proposed acquisition of Ava Trade was terminated by the sellers on 23 November 2015, Playtech has withdrawn its application, bringing this process to a conclusion,” the company said.

Playtech announced back in early October that would formally challenge the CBI after the regulator raised several objections to the deal.

Late last month, however, the company said it is abandoning its plans to take over Ava Trade and Plus500, a spread betting company, due to its inability to resolve regulatory concerns.

Founded by Israeli businessman Teddy Sagi, Playtech is traditionally focused on developing sports betting and casino games software. However, the company announced over the summer that it plans to expand its operations, first by spending £460 million to acquire UK-listed Plus500 and by bidding $105 million to acquire Ava Trade.

In addition, the company also shelled out €208 million in April to buy majority stake in Sagi’s TradeFX, a platform for CFD and binary options trading.

According to Israeli media outlet Globes, Sagi’s criminal record may have contributed to the failure of the Plus500 acquisition. Globes quoted capital market sources who claimed the FCA demanded that Sagi, who went to Israeli prison in the 1990s on stock fraud conviction, sell most of his 30.6 percent stake in Playtech.

Analysts believe the Plus500 deal would’ve dealt a “serious blow to Playtech’s ambitions in financials” if it falls through. Now, the collapse of not just one, but two proposed acquisitions will limit the division’s future growth. On the other hand, the company now has about a billion dollars in ready cash lying around, waiting for any opportunity in the UK’s merger-mad marketplace.