The story behind Playtech’s sale of Finalto

Here is what people should know about the background information about the technical software giant and two of the potential buyers.
 
In late May, online services software supplier Playtech published an announcement to confirm the proposed sale of its financial trading unit Finalto (formerly known as TradeTech) with a management consortium of Israeli businesses, including Barinboim Group, Leumi Partners and Menora Mivtachim Insurance. The deal is also backed by Phoenix Insurance Company Limited.
 
One thing that people found particularly intriguing is that two of the four potential buyers, namely Leumi Partners and Phoenix Insurance, actually have little-noticed links with Playtech.
 
People may wonder if this is somehow related to why the technical software supplier is so eager to undersell Finalto – its main profit engine in 2020 as well as a promising unit with steady growth and abundant cash – for merely $200 million.
 
Unveil how each of the two Israeli companies is tied to Playtech.
 
Leumi Partners:
In 2016, the Panama Papers, a massive leak of 11.5 million confidential documents from Panamanian law firm Mossack Fonseca, exposed how the rich and elites hid their enormous fortune in offshore accounts. Playtech’s founder Teddy Sagi was one of the prominent online services-world figures. It was revealed that most of the 16 offshore companies he owned were established by Mossack Fonseca through an intermediary Israeli bank called Bank Leumi. Executives of the bank served as board members at many of his companies.
 
It is obvious that the Sagi has a deep relationship with Bank Leumi. Considering that Leumi Partners is the VC division of Bank Leumi, is it possible that Playtech is deliberately trying to sell its lucrative business to the founder who has bowed out of the company in 2018?
 
Although Playtech appears to have cut all ties with Sagi, it seems that the Israeli billionaire still has huge influences.
 
Phoenix Insurance:
From the official documents of online services operator 888 Holdings, it is clear that Phoenix Holdings Ltd, the holding company of Phoenix Insurance Company Limited, is one of its shareholders, controlling 4.87% stake in the company which is in competition with Playtech. Adding to the complexity, Brian Mattingley, who has spent 15 years on the board of 888 holdings, is going to become Playtech’s next chairman in June.
 
Jason Ader, activist investor and Playtech shareholder, has been speaking highly of the incoming chairman, saying that the appointment ‘is very positive for leadership, governance and reputation’ and he ‘couldn’t think of anyone better for the job’. 
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