PartyBets and bWin’s sports betting division, sports.bwin.com, are likely soon to be absorbed by Isle of Man-based GVC Holdings Plc., if final negotiations on a takeover deal by GCV are approved by the parties involved. Both bwin.party and GVC issued statements yesterday confirming that the £900m acquisition of bwin.party by GVC appears to be on course, though no specific timetable for finalization has yet been set.
The GVC bid, which includes the backing of Canadian gaming company Amaya Gamimg as a virtual GVC partner, has been public knowledge since at least May. The deal appears to have been selected over a second and slightly less lucrative bid made by 888 Holdings which has also been known for some time. The 888 bid was initially for about £700m, and like the GVC bid was a composite offer made up of cash and stock swaps. 888 may have sweetened that offer since it was first acknowledged as one of “multiple offers” bwin.party was considering back in March, but it now appears that the GVC offer is nearing completion.
Should the deal with GVC be finalized, that company will likely take over all of bwin.party’s existing sports betting operations. Several units would be included, such as PartyBets and sports.bwin.com. GVC may also acquire certain business-to-business assets that remain part of the bwin.party portfolio, though bwin.party has divested itself of several of its secondary assets in recent years in an effort to keep cash flowing into the company.
As for Amaya and its major backing of the deal, the company will likely receive PartyGaming, PartyCasino, and the poker.bwin.com and casino.bwin.com units. Amaya already owns dominant online-poker market leader PokerStars, plus Full Tilt Gaming, which is generally ranked eighth, just behind PartyPoker in seventh. It’s one measure of how far PartyPoker has fallen on the global stage, however; just three years ago, Party ranked second behind Stars and ahead of several other competitors who have since vaulted well past the venerable PartyPoker site.
Bwin.party has posted a steady stream of red ink since PartyGaming and bWin merged back in 2011. The company has posted unending quarterly losses totaling in the hundreds of millions of pounds, and has seen its overall stick valuation slip to perhaps a tenth of what PartyGaming alone was worth about a decade ago. In bwin.party’s latest quarterly explanation as to why the company continues to lose money, CEO Norbert Teufelberger blamed the new UK Point-of-consumption (POC) tax, operational inefficiences, poor sporting results and, perhaps, the usual rain of frogs from above.
“We remain confident about the prospects for the second half and the outlook for our business,” said Teufelberger.
In truth, bwin.party has been a disaster ever since the companies merged, with former co-CEO James Ryan now long gone to a US-based startup, Pala Interactive, where he continues to spend investor’s funds. And all of it explains why the sale of bwin.party to someone, whether GVC or another bidder, has been a fait accompli in the gambling industry for quite some time.
The twin statements issued by GVC and bwin.party yesterday duly acknowledge that the tentative deal could still collapse. According to the GVC presser, “GVC notes today’s announcement made by bwin.party and confirms that it has made a proposal to acquire all of the outstanding and to be issued share capital of bwin.party at a price of 110 pence per bwin.party share, comprised of a combination of new GVC shares and cash. GVC looks forward to working with bwin.party and its advisers with a view to securing acceptance of its proposal and, in turn, making an offer to bwin.party shareholders.
“There can be no certainty,” added the release, “that an offer for bwin.party will be made. GVC will provide a further update for shareholders as and when appropriate.”
Kenneth Alexander, GVC Holdings’ CEO, said: “Any offer made by GVC for bwin.party would include part of the consideration in new GVC shares. Based on our experience with the successful Sportingbet acquisition and restructuring, we believe that the potential combination of GVC and bwin.party would result in substantial financial and operating synergies and represent an excellent opportunity for both GVC and bwin.party shareholders.”
Previously, in an interview for London’s Financial Times, Alexander had stated that he would be “staggered” if GVC and bwin.party weren’t able to complete negotiations and sign off on the deal.
Once or twice per month we will provide you with the latest sports tips and keep you updated about the biggest events.