The share price of online gaming software developer Playtech Cyprus Ltd. (AIM:PTEC) has fallen 1% so far this year. Nonetheless, or possibly because of this fact, an increasing number of investment institutions have lately become parties at interest in the company.
Last week, Playtech notified the London Stock Exchange that Capital Research and Management Company, had become a party at interest in it with a 5.49% stake. Capital Research is a unit of US money manager Capital Group Companies Inc., which has been around for 79 years. Its website declares, "We don’t buy shares; we buy companies. The purchase of shares is based on quick decisions, whereas the acquisition of companies is based on intensive research aimed at identifying long-term investments."
Earlier this month, Playtech announced that TIAA-CREF Investment Management LLC and Teachers Advisors Inc. had acquired a 3.02% holding in the company. TIAA-CREF stands for Teachers Insurance and Annuity Association - College Retirement Equities Fund, a huge US equity fund with almost $500 billion in assets under management, managing money for 3.6 million academics, healthcare providers, and employees of NPOs.
Capital Research and TIAA-CREF's decisions to invest in Playtech underscores the great interest in the company among US equity funds, even though the company is listed on the London’s Alternative Investment Market (AIM), and by US law, the company cannot operate in the US. Playtech is considered a global leader in its field, and this appears to be enough for global investment companies like the US equity funds.
Playtech's revenue rose 30% to €41.3 million for the third quarter from €31.9 million for the corresponding quarter of 2009. Playtech's operations accounted for €32.5 million of the total (up 17% from the corresponding quarter) and its share in the profit of UK betting company William Hill plc (LSE: WMH) accounted for €8.8 million (up 111%).
Playtech CEO Mor Weizel said, "We are encouraged by current trading and remain confident that the company will meet its expectations for 2010." He added that company's plan to list on the London Stock Exchange's main market was moving forward, five years after the company's IPO on the AIM. This goal may explain some of the interest investment institutions in the company, as such a listing will boost trading volumes and may send the share price upwards.
Tedi Sagi owns 40.4% of Playtech. The company's share price rose 0.3% in early trading in London to ₤4.01, giving a market cap of ₤970 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 23, 2010
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