(The author is a Reuters Breakingviews columnist. The opinions...

(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

By Robyn Mak HONG KONG, Nov 30 (Reuters Breakingviews) - Aristocrat Leisure (ALL) is making a reckless mobile bet. Shares in the $11 billion Australian group slumped on Thursday, on plans to buy online games firm Big Fish for nearly $1 billion. The takeover looks pricey, Big Fish's recent performance is weak, and the argument for combining physical gambling and online games is thin.

An overnight wobble in global tech stocks probably did not help the deal’s reception. Gauging its impact is also made harder by the simultaneous release of better-than-expected results from Aristocrat. Still, losing $780 million of market value after announcing a $990 million deal is hardly a vote of confidence in the potential for value creation.

That scepticism seems well-grounded. The all-cash deal gives Big Fish, the U.S.-maker of "Fairway Solitaire" and other casino and card games, an enterprise value of about 12 times trailing EBITDA, adjusted for various charges. That looks reasonably rich: higher than the 10 times Aristocrat recently paid for Israeli peer Plarium. Granted, a Chinese consortium paid almost 16 times EBITDA for rival Playtika last year – but that group is a clear market leader in online casino games, whereas Big Fish, despite the name, is not.

Recent results from Big Fish are also troubling. Third-quarter sales fell slightly, and costs rose, sending adjusted EBITDA tumbling to $17 million, down more than a third compared to last year. The group has been spreading into other kinds of mobile games and spending heavily to attract users, as it takes on giants such as Candy Crush-owner Activision Blizzard and China's Tencent <0700.HK>.

There is a broader strategic question, too. Aristocrat specialises in gambling machines. But with the casino industry in major markets such as America barely growing, the Sydney-based company has diversified into mobile games, where it has already snapped up Plarium and another outfit. Uniting apps and slot machines is unlikely to produce any real synergies, nor is traditional gambling expertise necessarily going to help Big Fish get ahead in a notoriously fickle and competitive market.

Investors applauded the smaller takeover of Plarium, but Aristocrat may now have overplayed its hand.

On Twitter http//twitter.com/mak_robyn

CONTEXT NEWS - Aristocrat Leisure, an Australian maker of gaming machines, said on Nov. 30 that it would buy Seattle’s Big Fish Games for $990 million in cash.

- Big Fish, a maker of mobile games such as “Big Fish Casino and “Cooking Craze”, is a unit of Nasdaq-listed Churchill Downs, the organiser of the Kentucky Derby.

- The deal values Big Fish at 11.9 times adjusted EBITDA for the 12 months to September, Aristocrat said. It expects the purchase to increase its preferred measure of earnings per share, which excludes amortisation and acquired intangibles, in the first full year of ownership.

- The company separately reported better-than-expected earnings of A$495 million ($375 million) for the year ending September, up 41 percent.

- In August, Aristocrat bought mobile-gaming company Plarium Global for $500 million.

- Shares of Aristocrat fell 5.8 percent to A$22.23 by early afternoon in Sydney on Nov. 30.

- For previous columns by the author, Reuters customers can click on [MAK/]

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BREAKINGVIEWS - William Hill's second fold raises the ante	

Reuter Australia's Aristocrat Leisure nets gaming company Big Fish for $990 mln Aristocrat press release http://ir.aristocrat.com/External.File?t=2&item=g7rqBLVLuv81UAmrh20Mpw1mWr4/KehNRxYSTP3So3uCtlp9ksFRh1Iq3GTJ0S98g+TOLd5yogoP4SmUB3xRDA==&cb=636475907459033544

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