GVC Wins Race to Acquire Bwin.Party
September 04 2015 - 5:20AM
Dow Jones News
GVC Holdings PLC said Friday it had clinched a deal to buy
online gaming firm Bwin.party digital PLC for 1.12 billion pounds
($1.72 billion), beating rival bidder 888 Holdings PLC to the
post.
GVC offered 25 pence a share in cash and 0.231 new GVC shares,
in a reverse takeover deal.
Bwin.Party had originally agreed to a cash and share offer from
888 Holdings worth 104.09 pence a share in July, only for that to
be countered by GVC in early August.
The latest deal was struck with GVC despite 888 Holdings having
made a new merger proposal.
Bwin.party said on Tuesday that it was evaluating the revised
888 Holdings offer, together with GVC's, and would consult with its
main shareholders before making a decision.
The fight for bwin.party, best known for online gaming brands
such as PartyPoker and Foxy Bingo, is part of broader consolidation
in the European gambling sector amid rising taxation and tighter
regulation.
A new U.K point of consumption tax came into effect in December
and levies a 15% tax on profit made by companies on bets by U.K.
consumers. The tax has led to more transparency, giving investors
better understanding of the income of online gaming firms, thereby
prompting possible M&A activity.
Regulations have also tightened elsewhere in Europe,
constraining growth and focusing companies' attention on how to
lower costs.
Ireland's Paddy Power PLC and smaller U.K. rival Betfair Group
agreed last week to a near $8 billion merger.
Betting and gaming services firm Ladbrokes PLC in July also said
it would merge with rival Gala Coral Group Ltd. in a stock
deal.
The sector has also seen smaller deals in the works in recent
months. Pools and tote betting firm Sportech PLC has confirmed
receiving a proposal from a Toronto-listed gaming and software
supplier Contagious Gaming Inc. regarding a possible recommended
offer for the company. Likewise, newly AIM-listed Stride Gaming PLC
acquired InfiApps Ltd., an internationally-focused mobile social
gaming firm, for up to $39.2 million, to help push the company's
entry into the social gaming segment of online gaming, it said.
Talking about the deal in a conference call, Bwin.party Chairman
Philip Yea said after considering the offers from 888 and GVC, Bwin
believed GVC's offer terms provided a better headline value,
synergies and cost savings. Mr. Yea added that, although the 888
offer was attractive, GVC's offer was more attractive in equity and
cash and provided an opportunity for Bwin shareholders to gain from
the enlarged group.
Bwin.party intends to recommend that bwin.party shareholders
vote in favor of the deal, he added. As a result of the bwin.party
board's change in recommendation, the previously agreed proposal
with 888 Holdings has been terminated.
The news sent Bwin.party shares up 2%, 888 Holdings lost 5.9%
and GVC also lost 2.3% in early trade.
Write to Razak Musah Baba at Razak.Baba@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 04, 2015 05:05 ET (09:05 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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