GVC Wins 9-Month War To Acquire bwin.party For $1.71 Billion

The 9-month war ended on a whisper, with the bwin.party board of directors deciding to accept the GVC offer at a meeting on Thursday, Sept 3, foregoing their earlier acceptance of an offer from 888 Holdings. The deal will cost GVC approximately $1.7 Billion and is expected to be formalized, as fast at the end of this year.

A joint statement was released by both the parties that stated, “the boards of GVC and bwin.party are pleased to announce that they have reached agreement on the terms of a recommended offer pursuant to which GVC will acquire the entire issued and to be issued ordinary share capital of bwin.party.”

The final deal has cost GVC 45% more than its original offer and the cash and share combination is expected to cost a total of £1.116 billion ($1.71 billion). According to Bloomberg the new deal will be composed of about 80% of new GVC shares and is based on a value of 129.64 pence a share.

GVC will get partial funding for the operation from Cerberus to the tune of €400 million ($445.2 million). It will also raise approximately €206 million ($229.3 million) “by way of a placing of new GVC shares to institutional investors, and a subscription of New GVC Shares by certain investors, under the Fundraising,” with certain GVC Directors also participating in the fundraising

GVC will get 66.6% of the shareholding, once the deal is completed and Norbert Teufelberger, current CEO of bwin.party, will serve as non-executive director of the new company.

Clarifying their stand, Philip Yea, Chairman, bwin.party said that, “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.”

Kenneth Alexander, GVC’s CEO added that they believe GVC was a “natural partner for bwin.party considering our strong sports betting and online gaming pedigree.”

He further added that together, the companies had a great future, especially in the field of sports betting, “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.”

Despite this announcement, analyst Nick Batram has advised a wait and watch attitude, as 888 Holdings was not expected to give in easily and anything could happen in such situations.

“GVC looks in a very strong position now but, while 888 isn’t quite dead, nothing is totally guaranteed. The gaming industry is seldom straightforward. It probably always is best to expect the unexpected.”

Bwin.party had earlier accepted 888 Holdings offer, saying that the company had better synergies, but GVC had refused to give up and even hinted at a hostile takeover. The settlement comes after months of ceaseless war between GVC and 888, which saw GVC not only increase its bid, but also frop partner Amaya to gain the gambling group.

Image Courtesy: livedealer.org