The Aristocrat Leisure Ltd (ASX: ALL) share price slipped today amid a fresh perspective on the gaming operator’s recently shot-down acquisition.
At the close, shares in Aristocrat Leisure are sitting at $40.76, down 1.55%.
The latest thoughts on where the gaming company will go from here are hitting the headlines four days after Aristocrat’s takeover of Playtech was blocked by shareholders.
However, analysts at Jarden now think there could be potential for a different deal.
A piece of Playtech might be better than none
While the $5 billion takeover of the online real money gambling company, Playtech, is now off the table, it seems a more subtle proposition from ASX-listed Aristocrat could be floating around the board room.
According to analysts at Jarden, another consideration for the company could be to pick apart Playtech. At first glance, investors might think this would be a lost cause considering the initial proposal was already voted down.
However, Jarden highlights that a grab for Playtech’s B2B business wouldn’t require approval from Aristocrat’s side of the fence. Instead, it would only need to get a thumbs up from Playtech shareholders — who already voted in favour of the previous deal.
Playtech has already removed another obstacle that would typically prevent an alternative proposal. Specifically, the online gaming giant has waived the typical 6-month window preventing a new bid. Given this, Jarden’s analysts believe there’s still a chance the two could unite in some form.
What are the alternatives?
Although ASX-listed Aristocrat Leisure has highlighted it will continue its push into online casino gambling ‘one way or another’, its other options are not so clear.
Jarden’s Ben Brownette believes the company could go down a path of more bite-sized mergers and acquisitions. Notably, Aristocrat last reported A$2.44 billion of cash on its balance sheet. For that reason, Brownette believes it has the financial resources to undertake such a strategy.
On the flip side, the company could suffer reduced returns on equity without a meaningful acquisition to make use of its capital.
How has Aristocrat Leisure been performing on the ASX?
Shareholders of Aristocrat Leisure could say the company has seen better days with its start to 2022. So far, the gaming company’s shares have shaved off 6.5% since the beginning of the year. For comparison, the S&P/ASX 200 Index (ASX: XJO) is down 4.5%.
Despite the ASX slump, Aristocrat Leisure is currently trading on a price-to-earnings (P/E) ratio of 37 times. This is roughly in line with the industry average.
The post Could Aristocrat (ASX:ALL) still be eyeing a Playtech deal of sorts? appeared first on The Motley Fool Australia.
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More reading
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- Aristocrat (ASX:ALL) share price sinks after $5bn Playtech takeover collapses
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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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