Tekkorp Digital Acquisition (NASDAQ:TEKK), a Las Vegas-based special purpose acquisition company (SPAC), is reportedly in talks to merge with Caliente Interactive in a deal rumored to be valued at $2.5 billion.
The transaction, if executed, would serve as the avenue through which Caliente — an online gaming firm with the bulk of its operations in Mexico — would become a publicly traded company.
Under the terms of the deal, which haven’t been publicly confirmed by the blank-check entity, a $250 million private investment in public (PIPE) would be delivered by Spanish language broadcasting giant Univision and its shareholders while another $190 million from other institutional investors would also be included.
UK-based Playtech, a maker of gaming software, controls nearly half of Caliente through a joint venture. The British technology company, which makes software for internet casinos, web-based poker rooms, and online sports wagering, is itself a takeover target.
Playtech also provides software for fixed-odds arcade games, online games, and provides services for scratch games. It was founded in Estonia more than two decades ago, and is headquartered in the Isle of Man.
Bidding War Brewing for Playtech
Prior to the Caliente SPAC speculation surfacing, Playtech is a hotbed of acquisition speculation.
In October, it accepted an acquisition offer from Aristocrat Technologies, one of the world’s largest makers of gaming machines, valuing it at 58.4 percent to its last closing price before that proposal was revealed. While Playtech appears to favor that deal, that isn’t preventing other suitors from making overtures.
JKO Play Ltd., a consortium led by former Formula One team owner Eddie Jordan, is said to be readying an offer for Playtech, reports Sky News.
The other proposal to acquire Playtech is from Gopher Investments, the company’s second-largest shareholder. Earlier this year, Gopher attempted to acquire Playtech’s Finalto unit, entering into a bidding fracas with Finalto management in the process. Aristocrat’s offer for Playtech is conditional on the basis that Finalto is divested to Gopher.
Another Moving Part
While the sale of Playtech to any of the aforementioned bidders and Tekkorp Digital’s efforts to merge with Caliente Interactive are separate transactions, there are ties that likely need to be severed to execute the blank-check deal.
City sources said that Caliente was expected to take over Playtech’s right to acquire a 49 percent stake in Calipay, its parent company, which would trigger a payment to shareholders in the UK-based company,” according to Sky News.
Assuming Calipay compels Playtech to set it free, that could clear the way to merge with Tekkorp Digital Acquisition and perhaps renew faith in gaming SPAC deals following a recent series of failures in that space.
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