Plus500's biggest shareholder just slammed Playtech's takeover bid as 'opportunistic'

Mirjana Lucic-Baroni of Croatia celebrates after beating Simona Halep of Romania during their women's singles match at the French Open tennis tournament at the Roland Garros stadium in Paris, France, May 27, 2015. REUTERS/Vincent KesslerCrispin Odey wants a higher bid. Mirjana Lucic-Baroni of Croatia celebrates after beating Simona Halep of Romania.

The biggest shareholder of troubled City trading firm Plus500 has just slammed the takeover bid that came in on Monday as “opportunistic.”

Hedge fund giant Odey Asset Management said in a statement that the £459.6 million ($US702.05 million) bid made by gambling software company Playtech on Monday is “an opportunistic bid exploiting current regulatory issues and risks.”

To recap, Plus500’s share price went into free fall just over two weeks ago after the UK’s regulator told the company its anti-money laundering checks weren’t up to scratch. The Israeli-headquartered company had to freeze thousands of UK accounts while it scrambled to fix the problems.

Playtech then swooped in with a low-ball bid two days ago. The fellow Israeli company’s offer is almost half what Plus500 was worth before the crisis blew up, some £862 million ($US1.3 billion).

Odey Asset Management, headed by City of London supremo Crispin Odey, is sitting on 25% of Plus500 shares and said it plans to reject the offer. The investment house bought into Plus500 prior to the crisis, at pre-crisis levels, and has been buying throughout the share price slump, probably on the hopes of a rebound. If the deal goes through it would likely swallow a big loss.

Plus500’s management, who hold 35% of the company’s stock, have already backed the £4 ($US6) a share offer. The board says the deal will give the company the scale it needs to recover from this crisis and repair the business.

Odey said: “We understand that this cash acquisition may make sense for Plus500’s management and staff, whom we expect could be further incentivised by Playtech after the acquisition has completed. However, for independent shareholders we believe the current offer represents too great a discount compared to intrinsic valuation as a standalone entity.”

Even if Odey does reject Playtech’s offer the deal may still go through. As both companies are Israeli, the deal falls under Israeli takeover law which only requires 50.1% of shareholders to consent to the deal. Plus500 only need a further 15% of votes to get the deal done.

Meanwhile, a US hedge fund that has been attacking Plus500 claims the company is worth just 52p a share.

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