The Aristocrat Leisure Limited (ASX: ALL) share price is falling on Thursday morning.
At the time of writing, the gaming technology company's shares are down 3% to $40.01.
Why is the Aristocrat share price falling?
Investors have been selling down the Aristocrat share price on Thursday after it revealed that its $5 billion takeover of online real money gaming company Playtech collapsed.
According to the release, Playtech held a shareholder meeting on Wednesday, and based on proxy votes, Aristocrat was able to conclude that not enough votes were going to be received in favour of the deal. This has since being confirmed with an official vote count.
While the majority of Playtech shareholders were voting in favour of the deal, a group of investors have built a stake since Aristocrat made its offer and were able to block the deal. These investors are understood to be the reason that another suitor withdrew a competing takeover offer last month.
A disappointing and "highly unusual" situation
Aristocrat's CEO and Managing Director, Trevor Croker, was disappointed with the news.
He said "We are disappointed that our recommended offer to acquire Playtech plc is expected to lapse. Notwithstanding extensive due diligence on Aristocrat's part, developments since the announcement of our offer have been highly unusual and largely beyond Aristocrat's control."
"In particular, the emergence of a certain group of shareholders who built a blocking stake while refusing to engage with either ourselves or Playtech materially impacted the prospects for the success of our offer, which had been recommended by the Board of Playtech plc," Croker added.
What now?
While the Playtech takeover may have collapsed, Aristocrat remains committed to expanding in the online real money gaming (RMG) market.
Mr Croker commented: "From a strategic perspective, Aristocrat's commitment to participate in the online RMG segment will not change. In the future, online RMG capability will be one way we deliver new and connected experiences that leverage our world-leading content, and unlock additional value across Aristocrat's portfolio while deepening customer engagement."
"Our focus now shifts to accelerating our plans for alternative online RMG scaling options, and continuing to execute our growth strategy, in a way that is consistent with our rigorous investment criteria, high regulatory standards and integrity. We look forward to sharing more details with shareholders as we move forward," Mr Croker concluded.
