Pre-Annual General Meeting Information • Jun 24, 2021
Pre-Annual General Meeting Information
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant, fund manager or other appropriate independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are in the United Kingdom or from another appropriately authorised independent financial adviser if you are in a territory outside the United Kingdom.
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This document is a circular relating to the Disposal and has been prepared for the purposes of complying with the laws of the Isle of Man and the Listing Rules and the information disclosed may not be the same as that which would have been disclosed if this document had been prepared in accordance with the laws and regulations of any other jurisdiction.
This document should be read as a whole. Your attention is drawn, in particular, to the risk factors set out in Part II of this document and to the letter from the Chairman of Playtech plc that is set out in Part I of this document and which contains a unanimous recommendation from the Board that you vote in favour of the Resolution to be proposed at the General Meeting referred to below.
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As a result of the current COVID-19 pandemic and the legislative measures and associated guidance introduced by the UK government in response, for the safety of our Shareholders, our employees, our advisers and the general public, the General Meeting will be held as a closed meeting. Attendance by Shareholders at the General Meeting in person will not be possible and Shareholders or their appointed proxies (other than the chair of the General Meeting) will not be permitted entry to the General Meeting. We will continue to closely monitor the rapidly developing impact of COVID-19, including latest government guidance, and how this may affect the arrangements for the General Meeting. If it becomes necessary or appropriate to revise the current arrangements for the General Meeting, further information will be made available on our website at www.playtech.com and/or via RNS. We want to assure Shareholders that their views and questions are important to us and therefore, we are asking shareholders to submit their questions relating to the business to be dealt with at the General Meeting in writing at least 48 hours prior to the General Meeting and we will deal with all questions raised. Written questions should be submitted to our Company Secretary, Brian Moore, at [email protected] and/or our Director of Investor Relations & Strategic Analysis, Chris McGinnis, at [email protected].
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The Disposal is subject to, and conditional upon, inter alia, the approval of Shareholders at the General Meeting.
A summary of the action to be taken by Shareholders is set out on page 8 of this document and in the notice of General Meeting.
UBS AG London Branch, acting as financial adviser and Joint Sponsor, is authorised and regulated by the Financial Market Supervisory Authority in Switzerland. It is authorised by the Prudential Requlation Authority and subject to requlation by the FCA and limited requlation by the Prudential Regulation Authority in the United Kingdom. Goodbody Stockbrokers UC, acting as Joint Sponsor, is authorised and regulated by the Central Bank of Ireland and is also subject to regulation by the FCA. Each of UBS AG London Branch and Goodbody Stockbrokers UC are acting exclusively for the Company and no-one else in connection with the Disposal and will not be responsible to any person other than the Company for providing the protections afforded to their clients or for providing advice in relation to the contents of this document or the Disposal.
Apart from the responsibilities and liabilities, if any, that may be imposed on UBS AG London Branch and Goodbody Stockbrokers UC under FSMA or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where the exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, UBS AG London Branch and Goodbody Stockbrokers UC accept no responsibility whatsoever and make no representation or warranty, express or implied, as to the contents of this document, including its accuracy, completeness or verification or for any other statement made or purported to be made by them, or on their behalf, in connection with the Company, the Ordinary Shares or the Disposal. The Joint Sponsors accordingly disclaim, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to above) which they might otherwise have in respect of this document or any such statement.
No person has been authorised to give any information or make any representations to Shareholders with respect to the Disposal other than those contained in this document and, if given or made, such information or representations must not be relied on as having been authorised by or on behalf of the Company or the Directors or by UBS AG London Branch and Goodbody Stockbrokers UC or any other person involved in the Disposal. None of the above take any responsibility or liability for and can provide no assurance as to the reliability of, other information that you may be given. Subject to the Listing Rules, the Prospectus Regulation Rules, MAR and the Disclosure Guidance and Transparency Rules, neither the delivery of this document nor holding the General Meeting shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this document or that the information in it is correct as of any subsequent time.
This document contains forward-looking statements. Statements containing the words "intends", "aims", "anticipates", "assumes", "budgets", "could", "contemplates", "continues", "plans", "predicts", "projects", "schedules", "seeks", "shall", "should", "targets", "would", "believes", "anticipates", "may", "will", "estimates" "expects" and "outlook" or, in each case, their negative or other variations, or words of similar meaning are forward looking. These forwardlooking statements are subject to assumptions, risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, there can be no assurance that these expectations will prove to have been correct. Given these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by those forward-looking statements. Each forward-looking statement is correct only as of the date of the particular statement. The Company does not undertake any obligation publicly to update or revise any forward-looking statement as a result of new information, future events or other information, although such forward-looking statements will be publicly updated if required by the Listing Rules, the Prospectus Requlation Rules, the Disclosure Guidance and Transparency Rules, the rules of London Stock Exchange plc or by law. For the avoidance of doubt, nothing in this paragraph is intended to qualify the working capital statement set out in paragraph 9 of Part VI of this document.
This document is dated 24, lune 2021
Last time and date for receipt of a Form of Proxy for the General Meeting Last time and date for receipt of CREST Proxy Instructions for the General Meeting General Meeting Completion of the Disposal*
10.00 a.m. on 13 July 2021 10.00 a.m. on 13 July 2021 10.00 a.m. on 15 July 2021 by 31 December 2021
Notes:
* Subject to satisfaction (or, where appropriate, waiver) of relevant conditions to completion of the Disposal, details of which are set out in paragraph 1.3 of Part V of this document.
Unless otherwise stated:
Unless otherwise indicated, financial information in this document relating to the Company and the Finalto Group has been prepared in accordance with IFRS and consistently with the accounting policies adopted by the Company in preparing its financial statements for the period ended 31 December 2020.
Certain data in this document, including financial, statistical and operating information, has been rounded. As a result of rounding, the totals of data presented in this document may vary slightly from the actual arithmetic totals of such data. Percentages have also been rounded and accordingly may not add up to 100 per cent.
Unless otherwise indicated in this document, all references to:
The functional and presentational currency used for the accounting records of the Finalto Group is USD, and details of how such accounting records are translated for the purposes of the Playtech Group's audited consolidated financial statements which are presented in Euros are set out in Note 5 (Significant accounting policies) to the financial statements in the Company's Annual Report and Financial Statements for the year ended 31 December 2020.
Unless otherwise stated, no statement in this document is intended as a profit forecast or a profit estimate for any period and no statement in this document should be interpreted to mean that earnings, earnings per Ordinary Share, income or cash flow for the Company, the Finalto Group or the Continuing Group (as appropriate) for the current or future financial years would necessarily match or exceed the historical published earnings, earnings per Ordinary Share, income or cash flow for the Company, the Finalto Group or the Continuing Group (as appropriate).
The release, publication or distribution of this document in jurisdictions other than the United Kingdom and the Isle of Man may be restricted by law and therefore persons into whose possession this document comes should inform themselves about, and observe, any applicable restrictions or requirements. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction. This document has been prepared for the purposes of complying with Isle of Man law and the Listing Rules and the applicable rules and the information disclosed may not be the same as that which would have been disclosed if this document had been prepared in accordance with the laws and regulations of any jurisdiction outside of the Isle of Man.
No person has been authorised to give any information or to make any representations other than those contained in this document and, if given or made, such information or representations must not be relied on as having been authorised by the Company, the Directors, UBS AG London Branch and Goodbody Stockbrokers UC.
The contents of this document are not to be construed as legal, business, financial or tax advice. Each Shareholder should consult its own legal adviser, business adviser, financial adviser or tax adviser for legal, business financial or tax advice respectively.
Without limitation, unless expressly stated in this document (in particular, see paragraph 12 of Part VI of this document), the content of the Company's website, and any link accessible through the Company's website, do not form part of this document.
This document is not a prospectus and it does not constitute or form part of any offer or invitation to purchase, acquire, subscribe for, sell, dispose of or issue, or any solicitation of any offer to sell, dispose of, purchase, acquire or subscribe for, any security pursuant to this document or otherwise
Mor Weizer (Chief Executive Officer) Andrew Smith (Chief Financial Officer) Brian Mattingley (Group Chairman) John Jackson (Non-executive Director) Ian Penrose (Non-executive Director) Anna Massion (Non-executive Director) John Krumins (Non-executive Director) Claire Milne (Non-executive Director)
Brian Moore
Ground Floor, St George's Court, Upper Church Street, Douglas, Isle of Man IM11EE
Financial Adviser and Joint Sponsor UBS AG London Branch 5 Broadgate, London, EC2M 2QS
Goodbody Stockbrokers UC Ballsbridge Park, Ballsbridge, Dublin 4, D04 YW83 Republic of Ireland
Bryan Cave Leighton Paisner LLP Governors House, 5 Laurence Pountney Hill, London EC4R 3AF
PricewaterhouseCoopers LLP 1 Embankment Place, London, WC2N 6RH
The Pavilions, Bridgwater Road, Bristol BS99 6ZY
(Incorporated in the Isle of Man with registered number 008505V)
Mor Weizer (Chief Executive Officer) Andrew Smith (Chief Financial Officer) Brian Mattingley (Group Chairman) John Jackson (Non-executive Director) Ian Penrose (Non-executive Director) Anna Massion (Non-executive Director) John Krumins (Non-executive Director) Claire Milne (Non-executive Director)
Registered Office Ground Floor St George's Court Upper Church Street Douglas Isle of Man IM11EE
24 June 2021
Dear Shareholder.
On 26 May 2021, the Company announced that it had entered into an agreement to dispose of the Finalto Business, which is structured as the sale of the Finalto Shares and the Finalto Loan by Playtech for total consideration of up to USD 210 million. The Purchaser is a newly formed company incorporated in Israel, established for the purpose of acquiring the Finalto Business, funded by a consortium consisting of Barinboim Group, Leumi Partners Limited and Menora Mivtachim Insurance Limited and by senior secured debt financing from The Phoenix Insurance Company Limited and certain of its affiliates, together with key members of the Finalto Business' management team. The consideration comprises an initial USD 185 million, of which USD 15 million is deferred for up to two years from Completion, together with a further USD 25 million contingent on certain cash flow or other criteria being met by the Finalto Business. There is additionally a daily profit charge of USD 24,000 payable to Playtech that accrues if Completion does not occur on or before 21 November 2021. The consideration has been determined on the basis that approximately USD 109 million of capital required to run the Finalto Business will be transferred with the Finalto Business on Completion.
I am therefore writing to you today, on behalf of the Board:
A summary of the principal terms and conditions of the Disposal and the Sale and Purchase Agreement is set out in paragraph 5 of this letter and Part V of this document
The Disposal, because of its size in relation to Playtech, is a Class 1 transaction for the purposes of the Listing Rules and is therefore conditional, amongst other things, upon the approval of Shareholders, A General Meeting is to be held at 10.00 a.m. at Midcity Place, 71 High Holborn, London WC1V 6EA on 15 July 2021 for the purpose of seeking such approval and a notice convening the General Meeting is set out at the end of this document.
If the Resolution is passed at the General Meeting, Completion of the Disposal is expected to take place in the fourth quarter of 2021 (following satisfaction or, where appropriate, waiver of the other conditions to the Disposal).
The Directors who own Ordinary Shares (which in aggregate equal 426,925 Ordinary Shares, representing approximately 0.14 per cent. of the issued share capital of the Company as at 22 June 2021, being the latest practicable date prior to publication of this document) unanimously intend to vote in favour of the Resolution set out in the Notice of General Meeting.
You will find definitions for certain capitalised terms used in this letter and in the rest of this document in Part VII of this document.
As Playtech has announced previously, including in its results announcement of 11 March 2021, it is a strategic focus of the Playtech Group to simplify its business operations and dispose of non-core assets. Playtech's strategy is to focus on its core gambling businesses, where it can leverage its market leading technology. As such, it has for some time been evaluating its options in relation to the Finalto Business.
As part of this strategy, the Board appointed UBS in 2019 to run a process to maximise value from a disposal of the business. In light of deteriorating market conditions for Finalto and its financial performance that year, however, the decision was taken to pause the process for a period of time.
In 2020, market conditions for Finalto rebounded significantly and Playtech re-commenced the process with UBS and was again approached by a number of interested parties. The Board recognised the potential to achieve its stated aim of disposing of Finalto from this position of strong performance and reinitiated the process to dispose of the business, including giving permission to Finalto's management team to participate in the process. Following press speculation, Playtech announced on 27 August 2020 that such a process had begun, which led to a number of further parties expressing interest in Finalto.
Following analysis of expressions of interest, and as announced on 25 January 2021, Playtech entered into a period of exclusivity regarding the possible sale of Finalto to the Purchaser, a consortium led by Barinboim Group and backed by Leumi Partners Limited and Menora Mivtachim Insurance Limited, together with key members of the Finalto Business' management team who will transfer with the Finalto Business.
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| SYUf#YbXYX 1/#>YWYaVYf 0./6 oq |
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Year ended 31 December 2020 €'000 |
|
|---|---|---|---|
| LYjYbiY | 70*660 | 45*7/3 | 121,883 |
| ;X^ighYX#? |
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| ? |
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| JfcZ]h-&`cgg'#VYZcfY#hUlUh]cb | //0*263 | &2.*.73' | (222,013) |
| JfcZ]h-&`cgg'#Zcf#h\Y#mYUf | 77*002 | &20*41/' | (224,744) |
The Purchaser is a newly formed company incorporated in Israel, established for the purpose of acquiring the Finalto Business.
The Purchaser is being funded by a consortium consisting of Barinboim Group, Leumi Partners Limited and Menora Mivtachim Insurance Limited and by senior secured debt financing from The Phoenix Insurance Company Limited and certain of its affiliates. The Purchaser will be supported by members of the Finalto Business' management team that will transfer with the Finalto Business, including Ron Hoffman (Chief Executive Officer of the Finalto Business) and Liron Greenbaum (Chief Operations Officer of the Finalto Business).
Barinboim Group is a private equity and venture capital firm based in Tel Aviv. Barinboim Group invests in companies operating in the media sectors.
Leumi Partners Limited is the merchant and investment banking arm of Bank Leumi (TASE: LUMI), one of the two largest banking groups in Israel. Leumi Partners Limited is based in Tel Aviv and offers direct equity investment in sectors such as technology media and telecom, consumer & retail, and healthcare. Leumi Partners Limited's line of business includes conducting investments and providing services such as underwriting, financial analysis and research, strategic advice, mergers & acquisitions, and raising equity and debt.
Menora Mivtachim Insurance Limited is an Israeli insurance and finance group headquartered in Tel Aviv. Menora Mivtachim Insurance Limited is active in the capital markets and finance sectors, including mutual funds management, financial portfolio management, underwriting and worldwide real estate investments. Menora Mivtachim Insurance Limited specialises in asset management, and manages the largest pension fund in Israel, New Mivtachim.
The Phoenix Insurance Company Limited is a subsidiary of Phoenix Holdings Ltd (TASE: PHOE), an Israeli insurance company listed on the Tel Aviv Stock Exchange.
Under the Sale and Purchase Agreement, Playtech has agreed to sell the Finalto Shares and the Finalto Loan to the Purchaser for cash consideration of up to USD 210 million.
The total consideration payable to Playtech under the Sale and Purchase Agreement is structured as follows: (i) USD 170 million payable in cash on Completion; (ii) USD 15 million, payable on the second anniversary of Completion or, if a specified exit event in respect of the Finalto Group occurs before such time, upon such exit event occurring; (iii) USD 15 million, payable if a threshold in respect of the cumulative net cash inflow of the Finalto Group is met on or before 30 June 2024 or, if a specified exit event in respect of the Finalto Group occurs prior to the sixth anniversary of Completion, which places an enterprise valuation on the Finalto Group of USD 300 million or more upon such exit event occurring; (iv) USD 10 million payable if a specified exit event in respect of the Finalto Group occurs prior to the sixth anniversary of Completion, which places an enterprise valuation on the Finalto Group of USD 420 million or more upon such exit event occurring; and (v) a daily amount of USD 24,000 in respect of each day in the period commencing on 21 November 2021 and ending on the day before Completion, save that, if Completion occurs on or before 21 November 2021, no such daily additional consideration will be payable to Playtech.
The consideration has been determined on the basis that approximately USD 109 million of capital required to run the Finalto Business will be transferred with the Finalto Business on Completion
The transaction sale price of up to USD 210 million, if paid in full, represents an enterprise valuation to Adjusted EBITDA* multiple of:
* Adjusted EBITDA for the financial years 2018, 2019, 2020 and the twelve months to April 2021 was USD 36.7 million, USD 8.9 million, USD 63.9 million and USD 9.2 million respectively.
Completion of the Sale and Purchase Agreement is conditional on (i) the approval of the Disposal by Shareholders and (ii) receipt of the consent of the Regulatory Authorities to the change of control of the relevant members of the Finalto Group.
The Sale and Purchase Agreement will terminate if the above conditions are not met or waived by 31 December 2021, which date may be extended by Playtech by up to three months or otherwise by agreement between Playtech and the Purchaser.
The Purchaser has paid a deposit of USD 5 million as security for the Purchaser's obligations under the Sale and Purchase Agreement (the "Deposit"). The Deposit will be released to Playtech on the earlier of Completion and the termination of the Sale and Purchase Agreement in accordance with its terms, other than where such termination is due to certain factors, which include but are not limited to the Resolution not being passed at the General Meeting (where the Purchaser has complied with its obligations in respect thereof). The Purchaser may deposit an additional USD 2 million to extend by an additional 20 business days the date by which it is required to make certain of the applications, submissions, notifications and filings required under the Sale and Purchase Agreement.
If the Sale and Purchase Agreement terminates because the Resolution was not passed at the General Meeting and, within 12 months following such termination, an exit event in respect of the Finalto Group by Playtech occurs that values the Finalto Group at an enterprise value in excess of USD 200 million. Playtech will pay to the Purchaser USD 8.8 million.
A more detailed summary of the Sale and Purchase Agreement is set out in Part V of this document.
The gross cash proceeds before transaction costs arising from the Disposal are expected to be an initial USD 185 million, of which USD 15 million is deferred for up to two years from Completion, together with a further USD 25 million contingent on certain cash flow or other criteria being met by the Finalto Business. There is additionally a daily profit charge of USD 24,000 payable to Playtech that accrues if Completion does not occur on or before 21 November 2021
If the Disposal were to complete in the current trading environment, which remains uncertain due to the impact of the global pandemic, Playtech's intended use of proceeds would be to retain the consideration until there is clarity, and consequently reduce net debt in the interim. Should Playtech receive the funds in the fourth quarter of 2021 as expected and on the assumption that there is greater clarity, Playtech remains committed to returning capital to Shareholders when appropriate, whilst balancing the opportunities to invest in the business and taking a prudent approach to its capital structure and leverage
In the financial year ended 31 December 2020, the Finalto Business generated revenues of €121.8 million and Adjusted EBITDA of €56.4 million. The financial information in this paragraph 6 has been extracted without material adjustment from the financial information contained in Part III of this document. The effects of the Disposal upon the Continuing Group's net assets are set out in Section A of Part IV of this document.
Founded in 1999, Playtech is a market leader in the gambling and financial trading industries. The gambling division is the core business of the Playtech Group, bringing innovative products and data-driven technology to licensees and end customers.
On 11 March 2021, Playtech published its results for the financial year ended 31 December 2020. For the financial year ended 31 December 2020, the Playtech Group generated revenues of €1.2 billion and Adjusted EBITDA of €310.4 million.
Following the Disposal, the Continuing Group will be able to focus on its gambling businesses. This aligns with Playtech's strategic focus of simplifying its business operations and disposing of non-core assets in order to realise shareholder value.
As Playtech announced in its AGM trading update of 26 May 2021, Playtech has continued to make progress against its strategic and operational objectives in 2021, including in its key target growth markets of the US, Latin America and Europe. This progress includes strategic agreements with the Greenwood companies in the US and Holland Casino in Europe, as well as the continued strong performance from Caliente and others in Latin America.
At the start of 2021, the Company's expectations assumed retail lockdowns in its major markets, including Italy and the UK, would last throughout most of Q1. While retail in the UK has reopened, closures in Italy have continued longer than expected and are currently anticipated to continue to at least the end of H1.
Online growth has remained very strong in 2021 in both B2B and Snaitech. This strength in B2B has led to Playtech as at the end of April, being ahead of its Adjusted EBITDA expectations at the start of the year (excluding Finalto). This outperformance for the first four months provides comfort for the H1 outlook despite the loss of retail revenues in Italy that will impact Q2.
Whilst the COVID-19 pandemic continues to pose challenges and the macroeconomic outlook remains uncertain, given the strong start to the year the Board is confident of the Company's prospects for the remainder of 2021, while mindful of the possibility for further unexpected lockdowns.
For the first four months of the 2021 financial year, the Finalto Group has generated Adjusted EBITDA of $C(299.782)$ in aggregate, and $C(796.928)$ over the twelve month period ended April 2021.
Whilst the Board considers the Disposal to be in the best interests of the Company and its Shareholders as a whole there are a number of potential risks and uncertainties that Shareholders should consider before voting on the Resolution. Your attention is drawn to the risk factors set out in Part II of this document. Shareholders should consider fully and carefully the risk factors associated with the Disposal and the Continuing Group when considering what action to take in connection with the General Meeting.
Completion of the Disposal is subject to, and conditional upon, inter alia, the approval of the Resolution by Shareholders at the General Meeting. Accordingly, set out at the end of this document there is a notice convening the General Meeting which is to be held at Midcity Place, 71 High Holborn, London WC1V 6EA at 10.00 a.m. on 15 July 2021 at which the Resolution will be proposed. The Resolution is set out in full at the end of this document in the notice of General Meeting. As a Class 1 transaction for the purposes of the Listing Rules, the Disposal may only be completed if it is first approved by Shareholders. In line with best corporate governance, voting on the Resolution will be taken on a poll, rather than a show of hands, to reflect the number of shares held by a Shareholder. The Resolution requires the approval of a majority of the votes cast (in person or by proxy) at the meeting in order to he nassed
As a result of the current COVID-19 pandemic and the legislative measures and associated guidance introduced by the UK government in response, for the safety of our Shareholders, our employees, our advisers and the general public, the General Meeting will be held as a closed meeting. Attendance by Shareholders at the General Meeting in person will not be possible and Shareholders or their appointed proxies (other than the chair of the General Meeting) will not be permitted entry to the General Meeting. We will continue to closely monitor the rapidly developing impact of COVID-19, including latest government quidance, and how this may affect the arrangements for the General Meeting. If it becomes necessary or appropriate to revise the current arrangements for the General Meeting, further information will be made available on our website at www.playtech.com and/or via RNS.
The results of the votes cast at the General Meeting will be announced as soon as possible once known through a Regulatory Information Service and on our website at www.playtech.com. It is expected that this announcement will be made on the same day as the General Meeting.
You will find enclosed with this document a Form of Proxy for the General Meeting. Please complete and submit the Form of Proxy in accordance with the instructions printed on it as soon as possible and, in any event, so as to be received by the Registrars, Computershare Investor Services (Jersey) Limited, c/o, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, no later than 10.00 a.m. on 13 July 2021. Alternatively, you may register your proxy appointment and instructions electronically by logging on to www.investorcentre.co.uk/eproxy no later than 10.00 a.m. on 13 July 2021.
Shareholders who hold their Ordinary Shares through CREST and who wish to appoint a proxy or proxies for the General Meeting by using the CREST electronic proxy appointment service may do so by using the CREST proxy voting service in accordance with the procedures set out in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider, should refer to that CREST sponsor or voting service provider, who will be able to take appropriate action on their behalf.
We want to assure shareholders that their views and questions are important to us and therefore, we are asking Shareholders to submit their questions relating to the business to be dealt with at the General Meeting in writing at least 48 hours prior to the General Meeting and we will deal with all questions raised. Written questions should be submitted to our Company Secretary, Brian Moore, at [email protected] and/or our Director of Investor Relations & Strategic Analysis, Chris McGinnis, at Chris [email protected].
Your attention is drawn to the further information set out in Part II to Part VI of this document and in particular the risk factors set out in Part II of this document.
Shareholders should read the whole of this document and not rely solely on information summarised in this letter, including the summarised financial information.
The Board has received financial advice from UBS in relation to the Disposal, and UBS and Goodbody are acting as Joint Sponsors. In providing such financial advice to the Board. UBS has relied on the Board's commercial assessment of the Disposal. The Board considers the Disposal to be in the best interests of Shareholders as a whole and unanimously recommends that Shareholders vote in favour of the Resolution at the General Meeting, as the Directors intend to do in respect of their own beneficial holdings, which in aggregate equal 426,925 Ordinary Shares, representing approximately 0.14 per cent. of the issued share capital of the Company as at 22 June 2021, being the latest practicable date prior to publication of this document.
Yours faithfully,
Brian Mattingley Chairman
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Certain of the Playtech Group's transaction costs will still be payable The Playtech Group expects to incur legal, accounting, financial adviser and transaction fees and other costs relating to the Disposal, some of which are payable whether or not Completion takes place. If the Disposal does not complete, the Playtech Group will not receive the cash proceeds from the Disposal and will not realise any of the potential benefits of the Disposal. These factors could have an adverse effect on the business financial
The Board believes that the Disposal currently provides the best opportunity to realise value for the Finalto Business. If the Disposal does not complete, the realisable value of the Finalto Business may be lower than could be realised by way of the Disposal. This could result in the value of the Finalto Business being materially different than it would be if the Disposal completes. There is also no assurance that the Playtech Group would be able to dispose of the Finalto Business at a later date at the same or at an improved valuation, or at all. There is a risk that the value of the Finalto Group may erode over time or Playtech could decide to wind the Finalto Group down over time if the Playtech Group is unable or unwilling to support it. If the Disposal does not occur the Continuing Group will forgo the other benefits of the Disposal including enabling the Continuing Group to simplify its business operations and dispose of non-core assets
If the Disposal does not complete, the Playtech Group will not receive the cash proceeds from the Disposal and will not achieve the anticipated benefits that the Playtech Group expects to realise as a result of the Disposal. Further details of those expected benefits are set out in paragraph 2 of Part I of this document. If the anticipated benefits are not achieved this could have an adverse impact on the Playtech Group's businesses, financial conditions and results of operations.
If the Disposal does not proceed, uncertainty created by the announcement of the Disposal may lead to management, employee, customer and supplier distraction and concern within the Finalto Business, due to perceived uncertainty as regards the future ownership of the Finalto Group which may have an adverse effect on the performance of the Finalto Group and therefore its value to the Playtech Group. Finalto's key management and/or other employees may choose to leave the Finalto Group which may result in the potential loss of expertise and capability within the Finalto Group in the short to medium term. Further, perceived uncertainty regarding the future ownership of the Finalto Business may make it difficult to maintain key relationships with customers, which may have an adverse effect on the performance of the Finalto Business and therefore its value to the Playtech Group. To maintain Shareholder value, the Board may be required to allocate additional time and cost to the ongoing supervision and development of the Finalto Business. This may adversely affect the Playtech Group's business, financial condition and/or results of operations.
If the Disposal does not complete, there may be an adverse impact on the reputation of the Playtech Group and/or share price due to intensified media scrutiny in connection with the attempted Disposal. Any such share price and/or reputational risk could adversely affect the Playtech Group's business, financial condition and/or operating results.
New risks to the Continuing Group as a result of the Disposal The Continuing Group's operations will be less diversified and will be more dependent on the Continuing Group's business It is a strategic focus of the Playtech Group to simplify its business
operations and dispose of non-core assets, and to focus on its core gambling businesses, where it can leverage its market leading technology. However, following the Disposal, the Continuing Group's business will be less diversified which means that the Continuing Group will be more susceptible to adverse developments in the remaining business and markets in which it operates. Any deterioration in the Continuing Group's performance could have a more pronounced negative effect on the Continuing Group's business, financial condition, results of operations and prospects than if the Disposal does not complete.
Shareholders should be aware that the value of an investment in the Continuing Group may go down as well as up and can be highly volatile. The price at which the Ordinary Shares may be quoted, the price which investors may realise for their Ordinary Shares, and liquidity in the market for the Ordinary Shares will be influenced by a large number of factors, some specific to the Continuing Group and its operations and some which may affect the industry as a whole, other comparable companies or publicly traded companies as a whole. The sentiments of the stock market regarding the Disposal will be one such factor and this, together with other factors including the actual or anticipated fluctuations in the financial performance of the Continuing Group and its competitors. market fluctuations, and legislative or regulatory changes in the applicable industry, could lead to the market price of Ordinary Shares going up or down as well as impacting liquidity in the Ordinary Shares.
Following the Disposal, the Continuing Group will no longer receive the contribution that the Finalto Business makes to the consolidated trading position of the Playtech Group. For the financial year ended 31 December 2020, the Finalto Business generated revenues of €121.8 million and Adjusted EBITDA of €56.4 million. For the financial year ended 31 December 2019, the Finalto Business generated revenues of €67.9 million and Adjusted EBITDA of €7.8 million. There can be no assurance as to the timeframe to offset the reduction in revenues and Adjusted EBITDA from its other operations, if any offset is achieved at all. Any material reduction in revenues and Adjusted EBITDA could have an adverse effect on the Continuing Group's financial condition and results of operations.
As a listed company, Playtech could receive approaches from third parties in the period between publication of this document and the date of the General Meeting seeking to instigate a public takeover of Playtech or an alternative transaction involving the Finalto Business, which might delay or prevent execution of the Disposal. Although the Sale and Purchase Agreement is binding on Playtech (such that Playtech would be obliged to proceed to Completion in the event that all conditions (including the obtaining of approval from the Shareholders) had been satisfied), in the event of an attractive takeover offer which was predicated on the termination of the Sale and Purchase Agreement, the Board would be obliged to consider that offer in accordance with their fiduciary duties and may, as a result of any such offer, withdraw their recommendation of the Resolution and the Disposal. Any such withdrawal of the Board's recommendation of the Resolution might delay or prevent Completion of the Disposal without necessarily resulting in completion of a more favourable transaction, which may adversely affect the Playtech Group's business, financial condition, results of operations and/or prospects.
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| SYUf#YbXYX 1/#>YWYaVYf 0./6 oq |
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| LYjYbiY | 70*660 | 45*7/3 | /0/*661 |
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| ;Xa]b]ghfUh]jY#YldYbgYg#VYZcfY#XYdfYW]Uh]cb#UbX#Uacfh]gUh]cb | &02*/22' | &01*./6' | &03*474' |
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| @]bUbWY#]bWcaY | 20*645 | 54*7/3 | 16. |
| @]bUbWY#Wcgh | &2*.2.' | &542' | &/6*256' |
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| NUl#YldYbgYg | &/1*04/' | &0*314' | &0*51/' |
| Profit/(loss) for the year | 77*002 | &20*41/' | &002*522' |
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| Adjusted EBITDA | 1.*/.3 | 5*6/0 | 34*240 |
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| As at 31 December 2020 €'000 |
|
|---|---|
| ASSETS | |
| Non-current assets | |
| JfcdYfhm*#d`Ubh#UbX#Yei]daYbh | 0*340 |
| L][\h#cZ#igY#UggYhg | 2*021 |
| CbhUb[]V`Y#UggYhg | 50*/54 |
| Ih\Yf#bcb+WiffYbh#UggYhg | 0*.53 |
| 6/*.32 | |
| Current assets | |
| NfUXY#fYWY]jUV`Yg | 611 |
| Ih\Yf#fYWY]jUV`Yg | 5*3/6 |
| =Ug#UbX#WUg#Yei]jU`Ybhg | 2/4/3/ 2023.0 |
| TOTAL ASSETS | 505,556 |
| LIABILITIES | |
| Non-current liabilities | |
FYUgY#]UV]]hm |
2*.45 |
>YZYffYX#hUl#]UV]]hmIh\Yf#bcb+WiffYbh# ]UV]]h]Yg |
4*/66 /33 |
| /.*2/. | |
| Current liabilities | |
| NfUXY#dUmUV`Yg | /*573 |
| ;acibhg#ckYX#hc#dUfYbh#WcadUbm | 0/0*540 |
FYUgY#]UV]]hm |
/*300 |
| =`]Ybh#XYdcg]hg | /.7*273 |
| =`]Ybh#ZibXg | /5.*645 |
| =cfdcfUhY#UbX#[Ua]b[#hUlYg#dUmUV`Y | 1*6/. |
| Ih\Yf#dUmUV`Yg | /.*5/1 |
| 3/.*742 | |
| Total Liabilities | 521,374 |
| Net Assets/(Liabilities) | (15,818) |
HchYg8
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M\UfY\cXYfg#g\ciX#fYUX#h\Y#k\cY#cZ#h\]g#XcWiaYbh#UbX#bch#fYm#gcYm#cb#h\Y#]bZcfaUh]cb#]b#h]g#JUfh#CP,#
Unaudited pro forma financial information continued
| Adjustments | ||||
|---|---|---|---|---|
| Playtech Group (note 1) €'000 |
Finalto Group (notes 2, 3) €'000 |
Transaction adjustments (note 4) €'000 |
Continuing Group €'000 |
|
| ASSETS | ||||
| Non-current assets | ||||
| Property, plant and equipment | 357,115 | 357,115 | ||
| Right of use assets | 66,702 | 66,702 | ||
| Intangible assets | 1,097,205 | 1,097,205 | ||
| Investments | 50,442 | 50,442 | ||
| Trade receivables | 18,405 | 18,405 | ||
| Other non-current assets | 70,449 | 12,397 | 82,846 | |
| 1,660,318 | $\overline{\phantom{0}}$ | 12,397 | 1,672,715 | |
| Current assets | ||||
| Trade receivables | 153,220 | 153,220 | ||
| Other receivables | 98,344 | 98,344 | ||
| Cash and cash equivalents | 683,681 | 136,496 | 820,177 | |
| 935,245 | $\overline{\phantom{0}}$ | 136,496 | 1,071,741 | |
| Assets classified as held for sale | 468,891 | (465, 880) | 3,011 | |
| TOTAL ASSETS | 3,064,454 | (465, 880) | 148,893 | 2,747,467 |
| LIABILITIES | ||||
| Non-current liabilities | ||||
| Loans and borrowings | 308.875 | 308,875 | ||
| Bonds | 873,129 | 873,129 | ||
| Lease liabilities | 61,547 | 61,547 | ||
| Deferred revenues | 2,128 | 2,128 | ||
| Deferred tax liability | 75,163 | 75,163 | ||
| Deferred and contingent consideration and redemption liability | 8,508 | 8,508 | ||
| Other non-current liabilities | 12,433 | 12,433 | ||
| 1,341,783 | $\overline{\phantom{000000000000000000000000000000000000$ | $\overline{\phantom{m}}$ | 1,341,783 | |
| Liabilities directly associated with assets classified as held for sale | 309,169 | (308, 612) | 557 | |
| Current liabilities | ||||
| Trade payables | 47,694 | 47,694 | ||
| Lease liability | 21,019 | 21,019 | ||
| Progressive operators' jackpots, security deposits | 100,211 | 100,211 | ||
| Client funds | 28,924 | 28,924 | ||
| Income tax payable | 12,017 | 12,017 | ||
| Corporate and gaming taxes payable | 126,949 | 126,949 | ||
| Deferred revenues | 9,735 | 9,735 | ||
| Deferred and contingent consideration and redemption liability | 1,162 | 1,162 | ||
| Provisions for risks and charges | 18,077 | 18,077 | ||
| Other payables | 147,777 | 147,777 | ||
| 513,565 | 513,565 | |||
| TOTAL LIABILITIES | 2,164,517 | (308, 612) | 1,855,905 | |
| NET ASSETS | 899,937 | (157, 268) | 148,893 | 891,562 |
The net assets of the Playtech Group at 31 December 2020 have $\mathbf{1}$ been extracted without material adjustment from the audited consolidated financial statements of the Playtech Group for the year ended 31 December 2020 which are incorporated by reference in this document.
The total assets of the Finalto Group, classified as available for sale, $\overline{2}$ . have been extracted from the financial information on the Finalto Group, set out in Part III of this document, adjusted as follows:
| Total assets of the Finalto Group as set out in Part III of this document* |
|
|---|---|
| 505,556 | |
| Excess cash to be extracted prior to Completion** | (39,676) |
| Assets classified as available for sale | 465,880 |
| Total assets of Finalto Group include USD 109,295,000 of Tier 1 Capital being transferred with the business. |
|
| ** In May 2021, an amount of €40,059,000 was deemed to be excess cash under the locked box closing mechanism, and was extracted by way of partial repayment of amounts owed to the parent company. |
|
| €'000 | |
| Total cash and cash equivalents of the Finalto Group | 416,151 |
| Client funds and deposits | (280, 362) |
| Tier 1 capital (\$109,295,000 at \$1.21:€1) | (90,326) |
| Cash needed for operations | (5,404) |
| Excess cash extracted from the Finalto Group | |
| in May 2021 | 40,059 |
| €'000 | |
|---|---|
| Total liabilities of the Finalto Group as set out in Part III of this document |
521.374 |
| Amounts owed to parent company eliminated on consolidation*** |
(212.762) |
| Liabilities directly associated with assets classified as available for sale |
308.612 |
*** In May 2021, €40,059,000 was repaid against the amounts owed to the parent company. The outstanding amount of €172,703,000 is being acquired by the purchaser. 4. At Completion, the Playtech Group is expected to receive €136,496,000 of net cash proceeds, after adjustment for estimated transaction costs of €4 million. As noted in paragraph 1.2 of Part V (Summary of the principal terms of the Disposal) of this document, the exact consideration is subject to certain adjustments in relation to the period between 31 December 2020 and Completion.
| Net cash proceeds on completion | 136,496 |
|---|---|
| Transaction costs | (4.000) |
| $($170,000,000$ at $$1.21 \text{:} \text{\textsterling}1)$ | 140.496 |
| Initial Consideration payable in cash on Completion | |
| TIVILI |
The Playtech Group is also expected to receive deferred consideration payments of between USD 15 million and USD 40 million, depending on future performance of the Finalto Group, or future disposal thereof.
| Deferred consideration | €'000 | |
|---|---|---|
| Fixed Consideration payable (\$15,000,000 at $$1.21 \text{:} } \in 1)$ |
12.397 | |
| Contingent consideration |
future disposal (or similar event) of the Finalto Group exceeding a certain value, has not been recognised in this pro forma information. The Additional Qualifying Consideration of USD 10 million, which
is dependent on a future disposal (or similar event) of the Finalto Group exceeding a certain value, has not been recognised in this pro forma information.
| €UUU | |
|---|---|
| Assets classified as held for sale | |
| Social and Casual Gaming business | 844 |
| Investments in associates | 2.167 |
| 3.011 | |
| Liabilities directly associated with assets classified as held for sale |
|
| Social and Casual Gaming Business | 557 |
24 June 2021
Dear Ladies and Gentlemen
We report on the unaudited pro forma financial information (the "Pro Forma Financial Information") set out in Section A of Part IV of the Company's circular dated 24 June 2021 (the "Circular").
This report is required by item 13.3.3R of the Listing Rules of the Financial Conduct Authority (the "Listing Rules") and is given for the purpose of complying with that item and for no other purpose.
In our opinion:
It is the responsibility of the Directors to prepare the Pro Forma Financial Information in accordance with item 13.3.3R of the Listing Rules.
It is our responsibility to form an opinion, as required by item 13.3.3R of the Listing Rules, as to the proper compilation of the Pro Forma Financial Information and to report our opinion to you.
No reports or opinions have been made by us on any financial information of the Company used in the compilation of the Pro Forma Financial Information. In providing this opinion we are not providing any assurance on any source financial information on which the Pro Forma Financial Information is based beyond the above opinion.
Save for any responsibility which we may have to those persons to whom this report is expressly addressed and which we may have to shareholders of the Company as a result of the inclusion of this report in the Circular, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with item 13.4.1R(6) of the Listing Rules, consenting to its inclusion in the Circular.
T: +44 (0) 2075 835 000, F: +44 (0) 2072 124 652, www.pwc.co.uk
PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of
PricewaterhouseCoopersLLPis1Embankment Place, London WC2N 6RH. PricewaterhouseCoopersLLP is authorised and regulated by the Financial Conduct Authority for designated investment business
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PricewaterhouseCoopers LLP 4KDSUHSHG"2FFQVPUDPUT"
The following is a summary of the principal terms of the Sale and Purchase Agreement. The Sale and Purchase Agreement is available for inspection as described in paragraph 14 of Part VI of this document.
Playtech currently holds the entire issued share capital of Finalto.
On 26 May 2021, Playtech and the Purchaser entered into a Sale and Purchase Agreement and related documentation.
Pursuant to the Sale and Purchase Agreement, Playtech shall sell to the Purchaser the Finalto Shares and the Finalto Loan, subject to the conditions set out in paragraph 1.3 of this Part V.
The Purchaser has paid a deposit of USD 5 million as security for the Purchaser's obligations under the Sale and Purchase Agreement. The Deposit will be released to Playtech on the earlier of Completion and the termination of the Sale and Purchase Agreement in accordance with its terms, other than where such termination is because: (i) the Resolution is not passed at the General Meeting (where the Purchaser has complied with its obligations in respect thereof); (ii) Playtech has caused the consent of the Regulatory Authorities to the change of control of the relevant members of the Finalto Group not to be obtained; or (iii) Completion does not occur due to Playtech's default.
The Purchaser may deposit an additional USD 2 million to extend by an additional 20 business days the date by which it is required to make certain of the applications, submissions, notifications and filings required under the Sale and Purchase Agreement.
The cash consideration payable to Playtech at Completion is USD 170 million (inclusive of the Deposit) in aggregate (the "Initial Consideration"). The Initial Consideration has been agreed on the basis of a "locked box" closing mechanism as at 31 December 2020 (the "Locked Box Date") and is subject to customary adjustments for any leakage (excluding permitted leakage) from the Finalto Group to the Continuing Group during the period from the Locked Box Date to Completion.
Playtech may also receive additional, deferred and contingent consideration, which is dependent on certain future events, the outcomes of which are uncertain as follows.
The consideration payable to Playtech under the Sale and Purchase Agreement will be allocated between the Finalto Shares and the Finalto Loan as USD1 to the Finalto Shares and the balance to the Finalto Loan save that if the consideration exceeds the aggregate amount of the Finalto Loan, such excess shall be allocated to the Finalto Shares.
Completion of the Disposal is conditional upon:
If the conditions have not been satisfied or waived on or before 31 December 2021 (the "Long Stop Date"), Playtech may extend the Long Stop Date by up to three months. Playtech may not extend the Long Stop Date more than once without the Purchaser's consent.
Playtech has agreed not to undertake certain material corporate actions in respect of the members of the Finalto Group, including not to issue any new shares in any member of the Finalto Group. However, customary exceptions to the restrictions apply, including that the restrictions do not apply where the Purchaser has given its prior written consent to such actions or if such actions are required in order to comply with any applicable law, regulation or court order.
Completion will take place ten business days after the date on which all the conditions have been satisfied or waived.
If Completion does not occur on the date set for Completion due to Completion formalities not taking place, the non-defaulting party may request an extension of five business days, proceed to Completion as far as practicable or terminate the Sale and Purchase Agreement.
If the conditions have not been satisfied or waived before the Long Stop Date (including any extension of the Long Stop Date), the Sale and Purchase Agreement shall terminate.
If the Resolution is not passed at the General Meeting, the Purchaser may terminate the Sale and Purchase Agreement within 30 days from the date of the General Meeting (or the date to which it is adjourned) and, if not already terminated by the Purchaser, Playtech may terminate the Sale and Purchase Agreement within a further 30 days.
If the Sale and Purchase Agreement terminates because the Resolution was not passed at the General Meeting and, within 12 months following such termination, an exit event in respect of the Finalto Group by Playtech occurs that values the Finalto Group at an enterprise value in excess of USD 200 million, Playtech will pay to the Purchaser USD 8.8 million.
If, prior to Completion, Playtech is in material breach of:
and the liability of Playtech in respect of such breach exceeds USD 15 million, the Purchaser will have the right to terminate the Sale and Purchase Agreement by written notice to Playtech within 20 business days of the Purchaser becoming aware of the breach.
Playtech has given limited warranties (relating to title, authority, capacity and solvency) in favour of the Purchaser under the Sale and Purchase Agreement and will also provide an indemnity to the Purchaser and certain members of the Finalto Group on Completion in respect of certain claims which have been threatened against members of the Finalto Group as described in paragraph 7.3 of Part VI below. The indemnity is subject to a financial cap of USD 60 million, and gives Playtech the right to retain conduct of the claims on behalf of the Finalto Group.
The Purchaser has also given customary warranties (relating to authority, capacity and solvency) in favour of Playtech.
All warranties will be repeated at Completion. The Purchaser intends to obtain warranty and indemnity insurance in respect of certain matters related to the Finalto Group and Playtech has agreed to contribute up to USD 400,000 in aggregate at Completion towards the premium for such policy
The Sale and Purchase Agreement includes customary financial thresholds, time limitations and other limitations and exclusions in relation to certain claims made under the Sale and Purchase Agreement by the Purchaser.
The aggregate financial liability of Playtech under the Sale and Purchase Agreement (other than in respect of claims for leakage) is limited, if the Sale and Purchase Agreement terminates before Completion, to USD 60 million and, on and after Completion, to the amount of the consideration paid by the Purchaser. The financial liability of Playtech in respect of claims for leakage is limited to the amount of the leakage received by the Continuing Group, plus amounts reasonably incurred by the Purchaser in recovery of such leakage
No claims under the Sale and Purchase Agreement in respect of the warranties may be brought against Playtech after the second anniversary of Completion. No other claims under the Sale and Purchase Agreement (other than in respect of claims for leakage) may be brought against Playtech after the third anniversary of Completion. No claims in respect of leakage may be brought against Playtech after the date that is nine months from the date of Completion.
Playtech has agreed to customary non-solicitation provisions relating to senior employees and customers of the Finalto Business and to a customary non-compete in relation to the Finalto Business as carried on at Completion, in each case for a period of two years from Completion. Playtech has agreed to procure that its subsidiaries comply with such restrictions.
The Sale and Purchase Agreement and any non-contractual obligations connected with it are governed by English law. The English courts have exclusive jurisdiction to determine any claim or dispute arising in connection with the Sale and Purchase Agreement, including disputes relating to any non-contractual obligations.
This document contains forward-looking statements. Statements containing the words "intends", "aims", "anticipates", "assumes", "budgets", "could", "contemplates", "continues", "plans", "predicts", "projects", "schedules", "seeks", "shall", "should", "targets", "would", "believes", "anticipates", "may", "will", "estimates" "expects" and "outlook" or, in each case, their negative or other variations, or words of similar meaning are forward looking. These forward-looking statements are subject to assumptions, risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, there can be no assurance that these expectations will prove to have been correct. Given these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by those forwardlooking statements. Each forward-looking statement is correct only as of the date of the particular statement. The Company does not undertake anv obligation publicly to update or revise any forward-looking statement as a result of new information, future events or other information, although such forward-looking statements will be publicly updated if required by the Listing Rules, the Prospectus Regulation Rules, the Disclosure Guidance and Transparency Rules, the rules of London Stock Exchange plc or by law. For the avoidance of doubt, nothing in this paragraph is intended to qualify the working capital statement set out in paragraph 9 of Part VI of this document.
The Company and the Directors, whose names appear on page 4 of this document, accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Company and the Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information
2.4 The secretary of the Company is Brian Moore.
As at 22 June 2021 (being the latest practicable date prior to the date of this document), the interests (all of which are beneficial) of the Directors and the members of senior management and their immediate families (including any interest known to that Director or member of senior management (as applicable) or which could with reasonable diligence be ascertained by him or any person connected with a Director or member of senior management (as applicable) within the meaning of section 252 to 255 of the Act) in the issued shares of the Company are as follows:
| Number | Percentage | Number of | |
|---|---|---|---|
| Name | of issued Ordinary Shares |
of issued Ordinary Shares |
Ordinary Shares under Option |
| Directors | |||
| Mor Weizer | 277,550 | 0.0905 | 3,014,685 |
| Andrew Smith | 84,875 | 0.0277 | 324,910 |
| Brian Mattingley | |||
| John Jackson | 5,000 | 0.0016 | |
| lan Penrose | 17,500 | 0.0057 | |
| Anna Massion | 32,000 | 0.0104 | |
| John Krumins | 10,000 | 0.0032 | |
| Claire Milne | |||
| Senior Management | |||
| Uri Levy | 458,567 | ||
| Shimon Akad | 58,275 | 0.0190 | 412,383 |
| Fabio Schiavolin | 50,000 | 0.0163 | 693.916 |
| Ron Hoffman | 50,300 | 0.0164 | 437,726 |
As at 22 June 2021 (being the latest practicable date prior to the date of this document), the Company is aware of the following existing Shareholders who, by virtue of the notifications made to it pursuant to the Articles and/ or by the Listing Rules, the Prospectus Regulation Rules, the Disclosure Guidance and Transparency Rules, the rules of London Stock Exchange plc or by law, are interested, directly or indirectly, in 3 per cent. or more of the issued shares of the Company:
| Name | Number of issued Ordinary Shares |
Percentage of issued Ordinary Shares |
|---|---|---|
| Setanta Asset Management | 26.268.941 | 8.57 |
| Boussard & Gavaudan | ||
| Asset Management | 16.354.565 | 5.34 |
| T Rowe Price Global Investments | 15.955.513 | 5.21 |
| UBS Wealth Management | 14.606.820 | 4.77 |
| Vanquard Group | 13.805.578 | 4.51 |
| Blackrock | 13.692.656 | 4.47 |
| Schroder Investment Management | 11.212.762 | 3.66 |
| Dimensional Fund Advisors | 10.705.167 | 3.49 |
| Interactive Brokers (EO) | 9.725.649 | 3.17 |
As announced by Playtech on 3 March 2021, Brian Mattingley has been elected as Non-Executive Chairman with effect from 1 June 2021.
Brian Mattingley has a specific letter of appointment (effective from 1 June 2021), rather than a service contract. His remuneration is determined by the Board within limits set by the Articles and is set taking into account market data as obtained from independent Non-executive Director fee surveys and his responsibilities.
Brian Mattingley has been appointed for an initial term of three years and, under normal circumstances, would be expected to serve for additional three-year terms, up to a maximum of nine years, subject to satisfactory performance and re-election at the Annual General Meeting as required. Brian Mattingley's letter of appointment may be terminated on six months' notice by either party or if he is not re-elected, he is disqualified or he commits aross misconduct
Brian Mattingley's letter of appointment is available for inspection at the Company's registered office.
Brian Mattingley's emoluments in 2021 will be paid as follows:
| Fees | Annual bonus | Benefits | Pension | Total |
|---|---|---|---|---|
| £338,000 | __ | __ | £338,000 |
No compensation is payable to the Directors upon termination of their appointment: the Directors shall be entitled to payment of accrued fees and reimbursement of expenses properly incurred, in each case up to the date of termination.
Other than as set out above in this paragraph 5, the Directors are not entitled to any termination benefits under the terms of their service agreements that have not already been published by the Company before the date of this document.
The following is a summary of the contracts (not being contracts entered into in the ordinary course of business) which have been entered into by Playtech and/or members of the Continuing Group either (i) within the two years immediately preceding the date of this document which are, or may be, material to Playtech or the Continuing Group; or (ii) which contain any provisions under which Playtech or any member of the Continuing Group has any obligations or entitlements which are, or may be, material to the Continuing Group as at the date of this document, in each case the details of which the Directors consider that Shareholders would reasonably require for the purpose of making a properly informed assessment of how to vote at the General Meeting.
A detailed summary of the Sale and Purchase Agreement is set out in Part V of this document.
There are no contracts (not being contracts entered into in the ordinary course of business) which have been entered into by Finalto and/or members of the Finalto Group either (i) within the two years immediately preceding the date of this document which are, or may be, material to the Finalto or the Finalto Group; or (ii) which contain any provisions under which the Finalto or any member of the Finalto Group has any obligations or entitlements which are, or may be, material to the Finalto Group as at the date of this document, in each case the details of which the Directors consider that Shareholders would reasonably require for the purpose of making a properly informed assessment of how to vote at the General Meeting.
There are no, nor have there been any, governmental, legal or arbitration proceedings (including such proceedings which are pending or threatened of which the Company is aware), during a period covering the previous 12 months prior to the publication of this document which may have, or have had in the recent past, significant effects on the Company and/or the Continuing Group's financial position or profitability.
Other than as set out in 7.3 below there are no nor have there been any governmental, legal or arbitration proceedings (including such proceedings which are pending or threatened of which the Company is aware), during a period covering the previous 12 months prior to the publication of this document which may have, or have had in the recent past, significant effects on the Finalto Group's financial position or profitability.
The former management team of ACM Group Limited ("ACM") (and their related entities) have threatened certain claims against the Finalto Group. The Company purchased the ACM business in October 2017. The threatened claims include a claim that they are entitled to additional earn-out consideration referable to the financial year ended 31 December 2019 in respect of such purchase and unpaid broker commissions that relate to their period as employees of the Finalto Group. Whilst the claimants suggested that such threatened claims are for significant amounts, they have not particularised such claims and the Company considers that the merits in relation to each of these threatened claims are strongly in favour of the Finalto Group and that it has strong counterclaims against the relevant parties should any claims be made. The threatened claims and counterclaims are not the subject of any active proceedings.
As detailed in paragraph 1.7 of Part V above, the Company intends to provide the Finalto Group with an indemnity in respect such potential claims and the Company will retain conduct of the claims on behalf of the Finalto Group.
There has been no significant change in the financial or trading position of the Continuing Group which has occurred since 31 December 2020. being the end of the last financial period for which audited financial statements have been published.
There has been no significant change in the financial or trading position of the Finalto Group which has occurred since 31 December 2020, being the date to which the historical information in Part III of this document was prepared.
The Company is of the opinion that the Continuing Group has sufficient working capital available for its present requirements, that is, for at least the period of 12 months from the date of this document.
| Name | Position |
|---|---|
| Ron Hoffman | Chief Executive Officer of the Finalto Business |
| Liron Greenbaum | Chief Operations Officer of the Finalto Business |
Other than those matters referred to in Note 36 to the Financial Statements of the Playtech Group for the year ended 31 December 2020, which are incorporated by reference into this document; those matters referred to in Note 36 to the Financial Statements of the Playtech Group for the year ended 31 December 2019, which are incorporated by reference into this document, those matters referred to in Note 31 to the Financial Statements of the Playtech Group for the year ended 31 December 2018, which are incorporated by reference into this document, during the period commencing on 1 January 2018 and terminating on the date of this document, the Company has not entered into any related party transactions.
Your attention is drawn to the following information which is incorporated by reference into this document:
| Document | Section | Page numbers in such document |
|---|---|---|
| Annual Report and Financial Statements | ||
| for the year ended 31 December 2020 | Note 36 | Page 185 |
| Annual Report and Financial Statements | ||
| for the year ended 31 December 2019 | Note 36 | Page 155 |
| Annual Report and Financial Statements | ||
| for the year ended 31 December 2018 | Note 31 | Page 170 |
Copies of the following documents will be available for inspection during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) at Ground Floor, St George's Court, Upper Church Street, Douglas, Isle of Man IM11EE from the date of this document up to and including the date of the General Meeting and for the duration of the General Meeting:
Dated: 24 June 2021
The following definitions apply throughout this document, unless stated otherwise:
| Act | the UK Companies Act 2006, as amended from time to time | |
|---|---|---|
| Adjusted EBITDA | EBITDA adjusted for certain non-cash and one-off items (i) in respect of the Playtech Group, for the year ended 31 December 2020, in accordance with Note 10 (Adjusted items) to the financial statements in the Company's Annual Report and Financial Statements for the year ended 31 December 2020, and (ii) in respect of the Finalto Group, for the three years ended 31 December 2020, in accordance with Note 2 to Part III of this document |
|
| Articles | the Articles of Association of the Company, as amended from time to time | |
| B 2 B | business to business | |
| B 2 C | business to consumer | |
| Board | the Board of the Company comprising the Directors | |
| Completion | completion of the Disposal in accordance with the terms of the Sale and Purchase Agreement | |
| Continuing Group | the Playtech Group excluding, following completion of the Disposal, the Finalto Group | |
| CREST | the paperless settlement system operated by Euroclear to facilitate the transfer of title to, and the holding of, shares in uncertificated form |
|
| CREST Manual | the rules governing the operation of CREST, consisting of the CREST Reference Manual, CREST International Manual, CREST Central Counterparty Service Manual, CREST Rules, Registrars Service Standards, Settlement Discipline Rules, CCSS Operations Manual, Daily Timetable, CREST Application Procedure and CREST Glossary of Terms (all as defined in the CREST Glossary of Terms promulgated by Euroclear on 15 July 1996 and as amended since) |
|
| CREST Proxy Instruction |
a properly authenticated CREST message appointing and instructing a proxy to vote in place of a Shareholder at the General Meeting and containing the information required to be contained in the CREST Manual |
|
| Directors | the Directors of the Company, as set out on page 4 of this document | |
| Disclosure Guidance and Transparency Rules |
the Disclosure Guidance and Transparency Rules of the FCA made in accordance with section 73A of FSMA | |
| Disposal | the proposed disposal of the Finalto Business which is structured as a sale of the Finalto Shares and the Finalto Loan by Playtech to the Purchaser pursuant to the Sale and Purchase Agreement |
|
| Euro or EUR | the official currency of certain of the member states of the European Union | |
| Euroclear | Euroclear UK & Ireland Limited | |
| FCA | the Financial Conduct Authority | |
| Finalto | Finalto Group Limited | |
| Finalto Business | the business carried on by the Finalto Group | |
| Finalto Group | Finalto and its subsidiary undertakings | |
| Finalto Loan | the amount of €172,703,191, being the aggregate principal amount borrowed and not repaid under a €248,979,343.82 loan facility made available by Playtech to Finalto in or around May 2015 and later documented in an intragroup loan agreement between Playtech and Finalto dated 26 May 2021 |
|
| Finalto Shares | the entire issued share capital of Finalto | |
| Form of Proxy | the form of proxy accompanying this document for use by Shareholders in relation to the General Meeting | |
| FSMA | the Financial Services and Markets Act 2000 (as amended) | |
| General Meeting | the general meeting of the Company to be held at Midcity Place, 71 High Holborn, London WC1V 6EA at 10.00 a.m. on 15 July 2021 (or any adjournment thereof), notice of which is set out at the end of this document |
|
| Goodbody | Goodbody Stockbrokers UC of Ballsbridge Park, Ballsbridge, Dublin 4, D04 YW83 Republic of Ireland | |
| Indemnity | the indemnity to be provided by Playtech to the Purchaser and certain members of the Finalto Group on Completion pursuant to the terms of the Sale and Purchase Agreement, details of which are set out in paragraph 1.7 of Part V of this document |
|
| Joint Sponsors | UBS and Goodbody, as joint sponsors to the Company | |
| Listing Rules | the Listing Rules of the FCA made in accordance with section 73A of FSMA | |
| Long Stop Date | 31 December 2021 which may be extended by Playtech by up to three months | |
| MAR | the UK version of the Market Abuse Regulation which is part of UK law by virtue of the European Union (Withdrawal) Act 2018 | |
| online | unless the context otherwise requires, shall include communications using the internet, mobile or tablet |
Definitions continued
| Ordinary Shares | the ordinary shares of no par value in the capital of the Company |
|---|---|
| Playtech Group | the Company and its subsidiary undertakings from time to time |
| Playtech or Company | Playtech plc |
| Rules | Prospectus Regulation the rules made for the purposes of Part VI of FSMA in relation to the offer of securities to the public and admission of securities to trading on regulated markets |
| Purchaser | Finalto S.P.V. Ltd |
| Registrars | Computershare Investor Services (Jersey) Limited, c/o, The Pavilions, Bridgwater Road, Bristol BS99 6ZY |
| Regulatory Authorities the FCA, the Cyprus Securities and Exchange Commission, the British Virgin Islands' Financial Services Commission and the Monetary Authority of Singapore (as the case may be) |
|
| Resolution | the ordinary resolution to approve the Disposal as set out in the notice of General Meeting at the end of this document |
| Sale and Purchase Agreement |
the sale and purchase agreement between Playtech and the Purchaser dated 26 May 2021 (and as amended and restated on 22 June 2021) in connection with the Disposal, details of which are set out in Part V of this document |
| Shareholders | the holders of the Ordinary Shares |
| subsidiary or subsidiaries |
as defined in section 1159 of the Act (as amended) |
| UBS | UBS AG London Branch, 5 Broadgate, London, EC2M 2QS |
(Incorporated in the Isle of Man with registered number 008505V)
Notice is given that a General Meeting of Playtech plc (the "Company") will be held at Midcity Place, 71 High Holborn, London WC1V 6EA on 15 July 2021 at 10.00 a.m. to consider and, if thought fit, pass the following resolution, which will be proposed as an ordinary resolution.
THAT the Disposal by the Company of the Finalto Business to the Purchaser pursuant to the terms set out in the Sale and Purchase Agreement dated 26 May 2021 including the Indemnity (capitalised terms as defined in the circular to Shareholders dated 24 June 2021).
be and is hereby approved, and that the directors of Playtech plc (the "Directors") (or a committee of the Directors) be and are hereby authorised to do or procure to be done all such acts and things as they may consider necessary, expedient or appropriate in connection with the Disposal and/or the Sale and Purchase Agreement and to agree such modifications, variations, revisions, waivers or amendments to the documents relating to any part of such matters (provided that any such modifications, variations, revisions, waivers or amendments are not of a material nature for the purposes of the FCA's Listing Rule 10.5.2), as the Directors may in their absolute discretion think fit.
BY ORDER OF THE BOARD
Registered Office:
Ground Floor St George's Court Upper Church Street Douglas Isle of Man IM11EE
Brian Moore Company Secretary 24 June 2021
$\mathsf{Q}$ In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear UK & Ireland Ltd.'s specifications and must contain the information required for such instructions, as described in the CREST Manual (available via www.euroclear.com/CREST). The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, must be transmitted so as to be received by the Company's agent (ID number 3RA50) not later than 48 hours before the time appointed for the meeting. For this purpose, the time of receipt will be taken to the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the Company's agent is able to retrieve the message by enguiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
Ground Floor St George's Court
Upper Church Street Douglas
Douglas
Isle of Man IM11EE
www.playtech.com
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