Playtech is asking investors for £250 million to buy troubled trading firm Plus500

Playtech just announced plans to raise £250 million ($395.4 million) to fund its £459.6 million ($702.05 million) acquisition of troubled trading firm Plus500.

Gambling software maker Playtech is selling 29,050,000 new shares, equivalent to a 9.9% chunk of the company.

Playtech's Israeli billionaire founder Teddy Sagi is buying 33.6% of the new shares through his investment vehicle Brickington, which currently owns 33.6% of Playtech.

The money raised from the shares sale will be put towards plans to buy London-listed financial trading firm Plus500, as well as another possible acquisition in the space.

Playtech, which made its money selling online gaming software to the likes of Ladbrokes, says it has the option to buy another company but hasn't named the business. The company recently moved into the trading space through the acquisition of TradeFX in April.

To recap, Plus500's share price went into free fall last month after the UK's regulator told the company its anti-money laundering checks weren't up to scratch. The Israeli-headquartered company lets ordinary people make risky, leveraged bets on stocks and currencies through something called a contract for difference (CFD).

Plus500 had to freeze thousands of UK accounts in the wake of the regulator's review and the company has been scrambling to fix its problems.

Playtech swooped in with a low-ball bid at the start of the month. The fellow Israeli company's offer is almost half the £862 million ($1.3 billion) Plus500 was worth before the crisis blew up.

Playtech's offer for Plus500 has proved controversial. Hedge fund giant Odey Asset Management, Plus500's biggest shareholder, says the offer is "an opportunistic bid exploiting current regulatory issues and risks."

Odey Asset Management, headed by City of London supremo Crispin Odey, is sitting on 25% of Plus500 shares and plans to reject the offer.

Even if Odey does reject the bid, the takeover may still go ahead. As both companies are Israeli, the deal falls under Israeli takeover law which only requires 50.1% of shareholders to consent to the deal. Plus500's management, who represent 35% of shares, have already approved the deal and they only need a further 15% of votes to get the deal done.

Meanwhile, a US hedge fund that has been attacking Plus500 claims the company is worth just 52p a share.

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