Odey Asset Management LLP, the wealth manager that has steadily been building its stake in Plus500 Ltd (LON:PLUS) over the past months, taking it above 25% earlier this week, has just released an official statement regarding the proposal by Playtech PLC (LON:PTEC) to purchase the entire share capital of the CFD broker.
You may recall that on June 1, 2015, Plus500 and Playtech announced an agreement on a bid of 400p per share, valuing Plus500 at £460 million, or USD $700 million.
Odey Asset Management LLP, which is currently the largest individual shareholder in Plus500, has concerns about the offer.
The wealth manager 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 favour of the cash acquisition of Plus500 at this price.
Even considering the current regulatory issues and near term risks, we believe the intrinsic value of the business on a longer term view is materially higher than 400p.
Odey continues to say that for independent shareholders the current offer represents too great a discount compared to intrinsic valuation as a standalone entity.
In conclusion, the company reiterates that in its view management is allowed to cease its commitment to Playtech’s proposed cash acquisition should another bidder present a higher offer.
Let’s recall that Plus500 had record revenues of $82.1 million in the first quarter of 2015, as the number of new clients surged 72% to 32,880. Business portal Globes has recently named Plus500 Israel’s most successful Internet company. Could it be that investors like Odey have a reason to seek more from bidders?
Interestingly, Plus500’s share price hardly reacted to the news, remaining well below the £4 Playtech bid. Shares in Plus500 trade around 370p per share this morning, far from the highs of 770p per share seen on April 24, 2015.
To view the original announcement by Odey as filed with the London Stock Exchange, click here.