Gambling firm GVC raises offer to $1.6 billion for rival Bwin.party

Mon Jul 27, 2015 11:34am EDT
 
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By Aastha Agnihotri and Neil Maidment

LONDON (Reuters) - Online gambling firm GVC Holdings (GVC.L: Quote) returned on Monday with a new 1 billion-pound ($1.55 billion) bid for rival Bwin.party Digital Entertainment (BPTY.L: Quote), looking to trump a recently accepted offer from 888 (888.L: Quote).

Bwin, put up for sale last year, accepted a cash and stock deal worth almost 900 million pounds from online casino and poker firm 888 this month, shunning an earlier 908-million-pound offer from GVC and Canada's Amaya Inc AYA.TO, which it deemed too complex and with less attractive growth prospects.

The tussle for Bwin is the latest in a flurry of merger activity in the industry, a trend likely to continue as firms seek to expand to offset increasing taxes and tighter regulation in Britain. Last week Ladbrokes and Gala Coral agreed a $3.4 billion all-share merger.

Bwin, which has struggled with the decline of regulated poker markets in Europe and to make cost savings since its creation via a merger of sports betting group Bwin and online poker group PartyGaming in 2011, confirmed on Monday that it had received a new offer from GVC and would respond in due course.

888 declined to comment on whether it planned to raise its offer, though analysts said they widely expected it to do so.

"This is a real statement of intent from GVC. The proposed premium over the accepted offer by 888 is such that the bwin.party board will probably have no choice but to reconsider its acceptance of the 888 offer," Davy Research analysts said.

"We would be surprised if 888 does not come back with a counter-offer of its own."

GVC said it would finance the new deal through a combination of new GVC shares and a 400 million-euro ($443 million) senior secured loan from private equity firm Cerberus Capital Management [CBS.UL], removing Amaya's involvement and some of the complexity that had worried Bwin.   Continued...

 
Bwin.party 's CEO Norbert Teufelberger  in Vienna July 29, 2010.  REUTERS/Herwig Prammer