According to a June 18th article in the Financial Times, Israeli billionaire Teddy Sagi has gained the upper hand over Crispon Odey in their battle for financial contracts trading firm Plus500.
The saga began when Plus500 was required by regulators to freeze customer accounts back in mid-May given concerns regarding the firm’s money laundering controls.
Sagi moved in with a 400 pence per share takeover bid a couple of weeks ago after Plus500’s shares lost over 60% of their value. Based on FT sources, Sagi has since increased his stake in the company to almost 10% using Playtech, his gambling software business.
Odey Asset Management, which is Plus500 largest shareholder, is objecting to Sagi’s offer, claiming it materially undervalues the company.
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As of the last official reports, Odey currently has a 19% stake in Plus500, but approval of the deal just requires the votes of the majority of shareholders.
Plus500, an Israeli business enabling customers trade contracts for difference, was stunned after regulators found its anti-money laundering controls insufficient around a month ago. The UK Financial Conduct Authority ordered an investigation and froze all customer accounts.
Shares of Plus500 from a high of 770 p to as little as 248 p, but have bounced back after Playtech’s bid and news that almost a quarter of Plus500’s customers have reactivated their accounts so far in June.
Plus500’s management owns 35.6% of the firm’s float, and are backing the acquisition by Playtech. Moreover, Playtech just acquired an additional 7% stake from shareholders including Newton Investment Management, upping its total stake in the firm to 9.9%. That adds up to over 45% who will now back the takeover.
Of note, a special general meeting has been scheduled for July 16th to vote on the proposed takeover. Plus500’s board of directors has called the offer from Sagi “fair to and in the best interests” of shareholders.
Plus500 was up 2.87% in trading on Thursday to 387.5p after Playtech announced it was raising money with a share placing to fund the takeover. Analysts point out this signals that Sagi believes he has the votes he needs to approve the deal.
