Odey Asset Management criticized the proposal of Playtech to acquire Plus500 as “opportunistic.” Odey is the largest shareholder of Plus500, an Israel-based online trading platform for contracts for difference (CFD).
Playtech agreed to buy Plus500 for 400 pence per share. According to Odey, the proposed price “materially undervalues” the online trading platform, and it will not vote in favor the transaction.
In a statement, Odey said, “We believe 400p per Plus500 share in cash to be an opportunistic bid exploiting current regulatory issues and risks. In our view 400p materially undervalues Plus500 and we do not intend to vote in favor of the cash acquisition of Plus500 at this price.”
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Odey added that the intrinsic value of Plus500 on a long-term view was “materially higher” than Playtech’s 400 pence per share takeover bid.
Odey understands that the management of Plus500 is considering Playtech’s cash acquisition as sensible. However, the investment management firm emphasized that the current offer was “too great a discount” compared with its intrinsic value as a standalone company. One question which comes to mind is can Odey afford to turn down the offer? Despite, the great long term track record, Odey was down a shocking 20% in April.
Odey welcomes higher offers for Plus500
According to Odey, the approach of the management of Plus500 to Playtech’s takeover bid allows other potential bidders to appraise its business. It also allows the management to stop its commitment with Playtech if another party submits a higher bid.
The statement of the investment management firm indicates that it welcomes higher offers from other potential bidders.
Plus500 anti-money laundering controls under review
The Financial Conduct Authority (FCA) of the United Kingdom ordered Plus500 to freeze its customer trading accounts without the proper AML documentation. The directive was part of the review on the company’s anti-money laundering, financial sanction systems, and other related regulatory controls.
Plus500 recently stated that it has a comprehensive plan to re-enable the currently suspended trading accounts of its customers. The company is re-approving existing customers providing proper AML documentation.
Plus 500 CEO Gal Haber told shareholders that they are doing everything in their power to protect the market position of the company in the United Kingdom.
The stock price of Plus500 slightly increased to 370.85 pence today around 5:06 PM in London.