GVC's bwin.party bid accepted as 888 withdraw

GVC's bwin.party bid accepted as 888 withdraw

Friday, September 4, 2015 Totally Gaming
888 said that bwin.party no longer offered "sufficient value"

GVC appears to have won the battle for bwin.party after its £1bn (€1.4bn/$1.6bn) takeover bid was accepted and 888 withdrew from the race.

Bwin.party said today (Friday) that the potential deal - worth 25 pence in cash and 0.231 new GVC shares, equating to about 129.64 pence per share – is now the board’s recommended bid, replacing 888’s 104.9p per share offer of July 17.

888 subsequently announced “it cannot see sufficient value in…a revision to its offer” and that “it is no longer in discussions regarding the acquisition of bwin.party”.

The bid was the fourth from GVC, which saw proposals of 110p, 122.5p and 125.5p rejected in favour of the 888 deal, that was seen to offer greater synergies.

Kenneth Alexander, chief executive officer of GVC, described his company as the “natural partner” for bwin.party, focusing on its strong sports betting performance since buying Sportingbet in 2013.

“GVC is the natural partner for bwin.party considering our strong sports betting and online gaming pedigree,” he said.

“Sports betting is in our DNA and leveraging GVC's experience of successfully acquiring and restructuring online gaming businesses, notably Sportingbet in 2013, we look forward to merging the two operations to deliver long term value for combined shareholders.

“GVC has been working closely with bwin.party's management and has identified many talented individuals with whom it looks forward to working to ensure the future success of the enlarged business.”  

GVC said that the proposed acquisition - subject to the approval of both companies' shareholders - would lead to “substantial cost savings of at least €125m per annum by the end of 2017” for the combined group.

GVC has performed strongly since its purchase of Sportingbet, with net gaming revenue up 32 per cent year-on-year in 2014, earnings up 22 per cent and the company renowned for its generous dividend pay-outs.

All three companies saw their share prices slip by lunchtime today (Friday), with GVC down almost four per cent. 

“In recommending the offer from GVC, the board has taken into account many factors including, but not limited to, the headline value per share and the consideration being offered, the level, timing and deliverability of the financial synergies to be generated and the enlarged Group's growth strategy in an increasingly competitive marketplace,” bwin.party chairman Philip Yea said.

“As a result of these and other factors, including the proven track record of GVC's management team in creating substantial value for shareholders, after a carefully managed and diligent review process, the board has withdrawn its recommendation for the 888 offer and is now advising bwin.party shareholders to vote in favour of the offer from GVC.”

 

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