Playtech Acquisitive with £112 Million Share Placing

With an eye on funding future acquisitions, Playtech Ltd., the London-listed software developer, raised £112 million via a share placing Tuesday.

The placing -- 21.6 million shares at 520 pence, or $10.14, a share -- was carried out by Collins Stewart, a British financial services company.

In a prepared statement, Collins Stewart said the placing was "heavily oversubscribed," while an article in Forbes magazine on Tuesday said it generated "significant U.S. demand."

Dealings in the placed shares, which represent 9.9 percent of Playtech's share capital before the placing, will commence on June 23.

Playtech has a market capitalization of £1.16 billion, or $2.27 billion. The company's market cap has more than doubled since its March 2006 I.P.O.

On Monday, Ben O'Toole, an analyst with Dresdner Kleinwort in London, put out a "buy" note on the company's shares, raising his target price from 545 pence to 690 pence.

Mr. O'Toole said that Playtech's share of the online poker market has increased from 3 percent at yearend 2006, to 10 percent at yearend 2007 to 11.4 percent in May 2008.

The company said in a stock exchange statement Tuesday that growth in recent years has been generated both organically and by acquisition.

Guy Emodi, Playtech's chief financial officer, indicated on the company's first-quarter conference call in May that revenue for the quarter derived primarily from organic growth in existing licensees.

The company currently serves 59 licensees. Its iPoker Network, by liquidity, is the largest that does not take United States wagers.

Playtech made no indication as to which businesses it would target for acquisition.

Asked his thoughts on Playtech's future acquisition strategy, Simon J. Holliday, a partner with Global Betting and Gaming Consultants in the United Kingdom, told Interactive Gaming News in an e-mail:

"Nothing specific, though I would have thought a number of smaller to medium sized ones (acquisitions) that add specific value to their armour, content or regions -- I cannot see them going for an acquisition of more of the same."