Hedge fund giant Crispin Odey is about to lose a huge battle for Plus500

Crispin Odey
Crispin Odey Simon Fielder / YouTube

It looks like Playtech’s £459.6 million ($US702.05 million) acquisition of troubled trading firm Plus500 is going to go ahead — despite Plus500’s biggest shareholder opposing the deal.

Playtech just announced that it has bought 10.75 million shares in Plus500, equivalent to 9.36% of the company. Plus500’s management, who speak for 35.6% of shares, have already endorsed the takeover deal, meaning Playtech now has just under 45% approval for the sale.

Both Playtech and Plus500 are Israeli companies and the deal falls under Israeli takeover law, which only requires 50.1% approval for an acquisition to go ahead. That means Playtech only needs around 5% of shareholders out of the remaining 55% to say yes to the deal for it to go through — not a huge hurdle.

If both parties do get the 5%, then they will have thwarted Plus500’s biggest shareholder — Odey Asset Management. The $US13.1 billion (£8.25 billion) hedge fund giant, which owns 25% of Plus500, says the Playtech offer is “an opportunistic bid exploiting current regulatory issues and risks.” Odey Asset Management, headed by City of London hedge fund titan Crispin Odey, plans to reject the offer, in the belief that the company is worth far more than £4 ($US6) a share.

To recap, Plus500’s share price went into free fall last month after the UK’s regulator told the company its anti-money laundering checks weren’t up to scratch. The Israeli-headquartered company lets ordinary people make risky, leveraged bets on stocks and currencies through something called a contract for difference (CFD).

Plus500 had to freeze thousands of UK accounts in the wake of the regulator’s review and the company has been scrambling to fix its problems.

Playtech swooped in with a low-ball bid at the start of the month. The fellow Israeli company’s offer is almost half the £862 million ($US1.3 billion) Plus500 was worth before the crisis blew up. Playtech is currently raising £250 million ($US395.4 million) to partially fund the takeover.

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