Playtech’s boss adds to cash pile
IT’S called feathering your own nest, and Israeli multi-millionaire Teddy Sagi has been accused of doing it for years.
Shares of Playtech, the gambling software group he founded and floated on AIM more than six years ago, ran into hefty selling and fell to 316p before closing 10.75p lower at 339.75p. It followed news that the company is again acquiring businesses owned by 48pc shareholder Sagi, adding yet more millions to his significant cash pile.
Playtech wants to branch out into the social gaming market and plans to spend around £78m on ‘ certain business to business real money gaming and business to business media assets’ from a company linked to Sagi. It also plans to buy or rent a new office worth £10.5m from a company in which Sagi has a beneficial interest. All very cosy!
Analyst Simon Mcgrotty at Davy Research: ‘£78m is a significant investment, especially in an area that is relatively unproven and there is no mention of the current profitability of the assets being acquired in the statement.’
Simon French at Panmure Gordon added: ‘The market will be – and obviously was – disappointed by the related party nature of the transactions.’
Shareholders will get to vote on the proposed deal, but with Sagi sitting on a hefty 48pc of the equity, stand only an outside chance of rocking the boat.
Back in 2010, Playtech bought PT Turnkey Services from Sagi for an upfront payment of £120m.
He is now estimated to have taken more than £500m out of the business since the flotation in 2006, enabling him to reportedly buy the most expensive house in Israel for about £22m.
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