Century Cruises responds to China Securities Regulatory Commission:Playtika does not engage in gambling in its main market

Century Cruises announced on the 11th a reply to the "Notice of Feedback on the Review of Administrative Licensing Projects by the China Securities Regulatory Commission" and its annexes. In the statement, it responded to questions such as the rationality of the price for the 30.5 billion yuan acquisition of Playtika and whether the game involved gambling.

Original title: Century Cruises responds to the 30.5 billion yuan acquisition of Playtika.

Century Cruises announced on the 11th by the China Securities Regulatory Commission on the "Notice of Feedback on the Review of Administrative Licensing Projects by China Securities Regulatory Commission" and its annexes. In the explanation, the reply was made on the rationality of the 30.5 billion yuan acquisition of Playtika and whether the game involved gambling.

According to the reply, Century Cruises 'transaction is for a domestic listed company to acquire an overseas online game target company. Assuming that this transaction is completed in 2017, the expected P/E ratios of the target company in the year when the transaction is completed and the second year are 15.30 times and 12.63 times respectively, which are higher than the average level of comparable transaction cases (13.35 times and 10.31 times respectively). The main reason is that Playtika has a competitive advantage over comparable transaction cases in the same domestic industry. In addition, the target company's main business is carried out in the United States, the United Kingdom and Israel, and its risk-free return rate is low.

Century Cruises also compared the operating conditions of the target company and comparable transaction cases in the same domestic industry. The results show that Playtika's revenue scale (4.547 billion yuan) is higher than that of companies that won the bid in comparable transaction cases in the same industry in China, and its profit level (23.47%) is higher than the average level of comparable transaction cases in the same industry in China (20.78%).

In addition, Century Cruises said that compared with comparable domestic companies, Playtika also has three major competitive advantages: refined operations and big data analysis capabilities, excellent industry M & A integration and game transformation capabilities, and a large player user base. and industry-leading brand advantages.

Regarding Playtika's gambling issues, which had attracted attention from the outside world, Century Cruises responded that Playtika, the target company of the acquisition, is a non-gambling business of Caesars Entertainment in the United States. Century Cruises provided legal opinions from lawyers in five countries: the United States, Canada, Australia, the United Kingdom, and Israel, stating that since Playtika game players have no right to obtain money, valuables or benefits during the game, and the countries where Playtika's main source of business income mainly rely on whether money, valuables or benefits are obtained during participation as one of the factors to consider whether it constitutes gambling, the online games played by Playtika do not constitute gambling in the above-mentioned major countries or markets.

On October 20 this year, Century Cruises announced that it would acquire Playtika, an Israeli company whose core business is casual social chess and card online games, from the consortium for a total price of 30.5 billion yuan. On December 2, Century Cruises received feedback from the China Securities Regulatory Commission on the rationality of the transaction and whether the underlying assets constitute gambling matters. Since then, reports have pointed out that Playtika is headquartered in Israel and its team is located in Israel, Ukraine, Belarus, Romania, the United States, Canada and other places. Playtika focuses on the development and operation of cross-platform casual social online games. It has six main game products, including Slotomania (slot games), WSOP (poker games), etc. Its game operation platforms include the App Store, Facebook and Google Play, etc. On Playtika's official website, its games are described as "casino-style." For example, Slotomania's Chinese translation is "Crazy Slot Machine." A game website points out that the game is addictive and its revenue channels are similar to real casinos.

Editor: Nancy