Gaming firm challenges Central Bank over blocked $105m deal
Gaming technology company Playtech has challenged the Central Bank on its decision to block the UK firm's $105m acquisition of Dublin-based company AvaTrade and is hopeful of a final decision on the matter before the end of the year.
Founded in 2006, AvaTrade is a financial services broker headquartered in Dublin.
Playtech is headquartered in the Isle of Man and was founded by Israeli billionaire Teddy Sagi.
It is a gambling software development company and owns the iPoker network, which bills itself as the largest online poker network in the world.
Playtech has recently been looking to move into the area of financial services and announced in July that it had agreed to acquire AvaTrade in an all-share that valued the broker at $105m (€96m).
Last month Playtech, which had sales of €450m last year, said that it expected the acquisition to close by either the end of September or early in October.
However, the Central Bank has opposed the deal, blocking it from going ahead.
Neither party has specified the concerns raised by the Central Bank or why it has opposed the acquisition, although it has been reported that the Central Bank is uneasy with the idea of one of its regulated entities being part of a gaming company.
Announcing its third quarter results yesterday, Playtech revealed that it has formally challenged the Central Bank's blocking of the acquisition.
A spokesman for Playtech told the Irish Independent that the company expects a final decision on the deal before the start of 2016.
He said: "We would be hopeful of a final decision from the Central Bank within the next few months, hopefully within the fourth quarter of the year."
A spokeswoman for the Central Bank said that the organisation "does not comment on ongoing regulatory matters".
She added: "Acquiring transactions for Central Bank regulated entities are assessed in accordance with our published procedures and the relevant legislative timelines."
AvaTrade had revenues of just under $70m in 2014, with earnings before deductions of $24.6m.
Playtech has already received approval for the AvaTrade acquisition from the Financial Services Commission in the British Virgin Islands.
There had been fears that the Central Bank's intervention could affect Playtech's £460m (€642m) deal to buy trading business Plus500, which is still awaiting regulatory approval.
However, these concerns appear unfounded, with Playtech saying yesterday it expects the Plus500 deal to close by the end of November.
Shares in Playtech were up by nearly 10pc mid-afternoon trading in London trading yesterday to £8.70 as the firm reported a strong set of third-quarter results along with the regulatory updates.
Revenue rose by 47pc compared to the same period last year to €171m, with the company adding that fourth quarter sales are up by 27pc so far compared to the last quarter of 2014.
Chief executive Mor Weizer, pictured, said that the company's gaming division "continues to enjoy double-digit underlying growth with our strong pipeline of opportunities."
He added: "Our financials division had a strong quarter driven by customer acquisition and we hope to complement our growth with the completion of the acquisitions of Plus500 and Ava Trade."