James Moore: Does Playtech want join the big boys' club?
James Moore is the Independent's Associate Business Editor and writes the Outlook City comment column from Tuesday to Friday. He also has a keen interest in disability issues and when not attempting to further injure himself playing wheelchair basketball.
Wednesday 18 April 2012
Outlook Is Playtech playing fast and loose with its investors?
It is certainly giving that impression. Yesterday the software company unveiled a "memorandum of understanding" to pay €95m (£78m) for businesses owned by its founder and biggest shareholder, the Israeli billionaire Teddy Sagi.
Oh, and it also wants to buy (or lease) a building from him (or an entity connected to him in regulatory announcement speak). And appoint him as an adviser, although the latter will only cost a euro (so about tuppence given the way that currency is going).
Now both deals may ultimately turn out to be good ones. The company's board might have looked at Mr Sagi's offering and said wow! This is a steal! Yes please! And office space is always handy (we'll leave aside the fact that most companies prefer to rent it).
But financial information beyond an assurance that social gaming is going to be the next big thing, is thin on the ground and, well, it just looks odd. Especially for a business that wants to join the grown ups on the FTSE 250 index.
The company says the announcement itself is evidence of it being strictly above board. Had it stayed with the kids on the Aim market it needn't have said anything until the deal was all but done.
Which isn't really the point. Moving on to the FTSE 250 brings enhanced visibility, the possibility of blue-chip investors and (crucially) credibility. It's just that those investors are (finally) beginning to ask questions having got their fingers burnt on a number of overseas businesses with, shall we put this delicately now, governance issues.
This isn't the first time that Playtech has raised eyebrows, and the way its shares reacted yesterday tells its own story. It has a choice to make: become a legitimate member of the big boys' club or get lumped in with some of those mining companies from former Soviet states with lots of those "issues".
Is Playtech a grown-up plc or just a toy of Mr Sagi's? That question is only going to get louder from here on in.
- 1 The difference between a migrant and refugee, in one sentence
- 2 Miley Cyrus calls out hypocrisy of women’s nipples being taboo
- 3 Celebrity Big Brother 2015: Tila Tequila kicked off show after 'describing Hitler as a good man'
- 4 iPhone 5c to be discontinued, no iPhone 6c to replace it
- 5 Blood Moon and Supermoon: September to bring brightest – and dimmest – full Moon of the year on same night
The difference between a migrant and refugee, in one sentence
Spain accused of 'provocation' after letting Russian submarine refuel off Gibraltar
Allonautilus scrobiculatus: World's 'rarest' creature spotted for only the third time ever
Miley Cyrus calls out hypocrisy of women’s nipples being taboo
Celebrity Big Brother 2015: Tila Tequila kicked off show after 'describing Hitler as a good man'
Climate change: 2015 will be the hottest year on record 'by a mile', experts say
Labour leadership: Jeremy Corbyn accused of 'deluding' young supporters with 'claptrap'
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith 'should resign over disability benefit death figures', says Jeremy Corbyn
Iain Duncan Smith calls for urgent ESA overhaul as part of drive to cut down welfare costs
iJobs Money & Business
£25000 - £30000 per annum: Recruitment Genius: From modest beginnings the comp...
£35000 - £40000 per annum: Recruitment Genius: From modest beginnings the comp...
£15000 - £65000 per annum: Recruitment Genius: This is an exciting opportunity...
£18000 - £20000 per annum: Recruitment Genius: This is a fantastic opportunity...