888 eyes new targets after bwin.party failure

888 eyes new targets after bwin.party failure

Tuesday, September 8, 2015 Totally Gaming
Brian Mattingley said that 888 will not become a takeover target

888 executive chairman Brian Mattingley has insisted that the operator will look at alternative acquisition targets, build up its sports offering and fend off any unwanted bidders following its failure to take over bwin.party.

After leading the chase for bwin.party for months as the board’s recommended buyer, a fresh bid by GVC was accepted last week and 888 pulled out of the race, saying there was no longer “sufficient value” in its target.

Mattingley has now told the Financial Times newspaper that his company had dropped out of the race because of concerns that there was not enough money left over to “carry out the synergies and cost savings that it had identified”.

However, just months after the company turned down a £700m (€964.7m/$1.08bn) offer from William Hill, Mattingley denied that the failure to acquire bwin.party had left 888 again vulnerable to Hills or even PokerStars owner Amaya, and was adamant that 888 could ride the regulatory and market changes that have spawned the recent wave of M&A consolidation.

“We are not a target,” he said. “We will do practical and strategic acquisitions particularly to build our sport betting.

“It is going to be a challenge. We will rise to it. We will not be cast aside. We are not an also-ran and we are not a one-trick pony. We have proved that we have got the critical mass.”

Meanwhile, analyst Peel Hunt says it is “not a big surprise” that GVC ultimately came out on top in the battle for bwin.party, having offered more money and targeted greater synergies.

A Peel Hunt note read: “Whilst the amount of equity involved means it wasn’t a straight shoot-out on price, the combination of the gap in value and GVC’s target synergies was too great for bwin to resist.

“If GVC does ultimately emerge victorious, then it will be a great coup for management and history suggests they will deliver.”

Peel Hunt also added that GVC’s success with Sportingbet, and the experience in sports books garnered through that deal, were key factors.

It added: “GVC’s management has an impressive track record of acquiring underperforming gaming assets and turning them around, as demonstrated by Sportingbet, where a pro forma €13.8m earnings loss in 2012 became a €49.2m profit in 2014.

“Furthermore, GVC management has significant sportsbook experience and the synergies from uniting under one platform should be substantial and no doubt will go a long way in delivering the €125m targeted by management.

“We had stated that if GVC could convince the bwin board that the synergies were real and deliverable, then its offer would have to be taken seriously – it has clearly done this.”

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