Teddy Sagi Sells Off Entire Stake in Playtech: Did He Jump or Was He Pushed?

Israeli billionaire Teddy Sagi has sold his remaining shares in Playtech, the online gaming software giant he founded 19 years ago and grew into the largest platform provider in the industry.

Playtech founder Teddy Sagi has been selling off shares in the company since 2014, but did corporate raider Jason Ader play a role in Sagi’s decision to finally quit ties with Playtech for good? (Image: Financial Times)

On Friday, Sagi sold 15,193,489 shares, worth $88 million. Including an additional sale two weeks ago, Sagi has offloaded 6.4 percent of the company this month, reducing his equity to zero.

The Tel Aviv native has been quietly divesting himself of the ownership of Playtech shares since 2014 as he refocuses on his growing property empire and new tech ventures.

But the divestiture also comes as the company faces pressure from US activist investor Jason Ader, who owns 5 percent of Playtech through his company SpringOwl Asset Management. A week ago, The Times reported Ader had written to Playtech directors urging them to cut ties with the company founder.

Ader’s Influence

Sources told The Times that Ader wrote Sagi’s “colorful past” may be damaging shareholder value while jeopardizing Playtech’s chances in the US. In 1993, when Sagi was 22, he was sentenced to nine months in prison by an Israeli judge for “grave deceit, bribery and insider trading,” after being found guilty of manipulating bond prices.

It’s believed that Ader called on the board to terminate a 2012 agreement between Sagi and Playtech which established Sagi would provide advisory services until he ceased to be a shareholder.

Former Wall Street analyst Ader worked with LVS in opening up Macau’s gaming market in the 2000s and also influenced the acquisition of bwin.party by GVC Holdings. Ader was instrumental in persuading the Stars Group board to sever ties to its founder, former chairman and CEO David Baazov. In 2016, Baazov was accused — but, unlike Sagi, not convicted — of securities fraud.

Stock Undervalued

Ader’s specialty lies in targeting underperforming public companies and applying pressure to effect changes that he believes will improve performance and increase value.

Playtech’s shares have plunged 50 percent since an all-time high of June 2017 and the company faced a shareholder revolt at its AGM over the summer. The corporate raider clearly thinks Playtech’s stock is currently undervalued and believes changes to corporate governance and structure will improve its reputation and value.

Until recently, Sagi was the company’s controlling shareholder but sold about 27 percent equity last year. He has largely reinvested in property and owns parts of London’s Holborn district, as well as the city’s famous Camden Market.

 

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