FCA nixes Sagi's Plus500 deal

Teddy Sagi

Market sources believe that the UK regulator demanded Teddy Sagi sell most of his stake in Playtech.

Israeli billionaire Teddy Sagi's dream of becoming a major player in the forex industry has been dealt a huge blow. The acquisition of Haifa-based forex trading company Plus500 Ltd. (LSE:PLUSP) by Sagi's online gambling platform company Playtech Cyprus Ltd. (LSE:PTEC) has broken down after failing to receive approval from the UK's Financial Conduct Authority (FCA).

Capital market sources believe that one of the reasons for the cancellation of the deal was the demand by the FCA, Britain's regulator for Plus500, which is defined as a financial institution, that Sagi sell most of his holdings in Playtech and refrain from being controlling shareholder of the company. 

Playtech said in response, "Discussions between Playtech and the FCA are confidential by law."

Playtech had agreed to pay £460 million ($697 million) for online securities trading company Plus500. Following reports that the deal had broken down, the company's share price on the London Stock Exchange fell 3.6%, giving a market cap of £398 million, while Playtech's share price fell 8%, giving a market cap of £2.5 billion.

It is now believed that Playtech's $105 million acquisition of Israeli contract-for-difference (CFD) foreign exchange broker Ava Trade, which was announced in July, may also be abandoned because of regulatory concerns.

Published by Globes [online], Israel business news - www.globes-online.com - on November 23, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

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