Bwin.party hopes US prospects can spur takeover

Bwin.party hopes US prospects can spur takeover

Thursday, May 21, 2015 Totally Gaming
Norbert Teufelberger highlighted the company's US position

Bwin.party chief executive Norbert Teufelberger told potential purchasers that it is “well-placed to secure a leading position” in regulated US markets as it announced a 13 per cent drop in Q1 revenue.

The gambling operator announced its results for the three months to March 31 during the week that it was revealed it had been the subject of a takeover bid from 888 and a joint proposal from GVC and Amaya.

While TotallyGaming.com understands that both bids are worth around £1bn (€1.40bn/$1.57bn), Bwin recorded average net daily revenue of €1.5m, which is down on the same period last year, while other key performance indicators such as unique active players and real money sign-ups were also down in double-digit terms.

However, Teufelberger focused on growth compared to Q4 2014, and highlighted his hopes for new markets opening in the US and the company securing a full licence in New Jersey and access partner status in Pennsylvania.

“In the US, draft legislation is being considered in both California and Pennsylvania,” Teufelberger said.

“On the back of the strength of our US platform and existing partnerships - that now includes a market access partner in Pennsylvania - we believe that we are well-placed to secure a leading position in each of these markets should a suitable regulatory and fiscal framework be introduced.”

Bwin.party said that sports betting wagering was up nine per cent year-on-year, but unfavourable football results in the period meant that the gross win margin at 8.7 per cent was 160 basis points lower than last year.

Casino wagering grew by one per cent to €1.72m but gross win margin fell to 3.4 per cent from 3.8 per cent in Q1 2014.

Operationally, Bwin.party said that cost savings of €15m per annum on-track for 2015 following completion of its technology integration, the sale of non-core businesses and more efficient, product-led marketing spend.

Teufelberger added: “The group has delivered solid growth since Q4 2014 on the back of continued mobile expansion.

“However, a lower than expected gross win margin in sports betting as experienced by other gaming operators and continued challenges in poker held back our year-on-year revenue performance during the first three months of 2015.

“Despite slightly lower revenue and additional taxes, continued careful management of our costs and further operational efficiencies have meant that group clean EBITDA margins for the first quarter are ahead of the board’s expectations and also ahead of last year.

“We are making good progress in respect of our non-core asset disposals and remain on track to meet the €30-€50m target for sale proceeds this year.”

Meanwhile, PokerStars owner Amaya has made its first comment on its interest in Bwin.party, which was revealed on Monday.

Amaya confirmed it has agreed to jointly finance a bid along with GVC to acquire the entire issued and to be issued share capital of the company and described its rationale for pursuing the deal.

A statement read: “Strategic acquisitions are one component of Amaya's growth strategy and, as such, the corporation regularly evaluates and sometimes pursues potential acquisition opportunities that may be accretive to shareholders and can expand its customer base and consumer offerings through the addition of new products, new geographies, and/or new consumers.”

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