* GVC makes 122.5p/share offer for Bwin
* Says Cerberus Capital to provide 400 mln-euro loan
* Cost savings to exceed 135 mln euros per annum (Adds shareholder quotes)
By Aastha Agnihotri and Neil Maidment
LONDON, July 27 (Reuters) - Online gambling firm GVC Holdings returned on Monday with a new 1 billion-pound ($1.55 billion) bid for rival Bwin.party Digital Entertainment , looking to trump a recently accepted offer from 888 .
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, 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, removing Amaya’s involvement and some of the complexity that had worried Bwin.
GVC, whose boss Kenny Alexander told the Financial Times on Monday that Bwin and several of its shareholders had been keen for GVC to return to talks, also plans to raise 150 million pounds through an equity placing to fund restructuring costs and refinance existing debt at Bwin.party.
GVC’s offer of 122.5 pence per share, consisting of 25p in cash and the rest in new GVC shares, is 18 percent higher than 888’s offer price of 104.09 pence.
The firm, whose shares listed on London’s junior AIM market give it a market value which is less than a third of Bwin‘s, said the deal would lead to cost benefits worth more than 135 million euros ($150 million) a year by the end of 2017, more than double 888’s estimated cost savings of $70 million.
U.S. activist investor Jason Ader, whose SpringOwl vehicle is among Bwin’s five biggest shareholders, said GVC’s new offer was still not enough and he would still prefer 888 if there was no further improvement in the bidding.
“If this was a 135p-140p price (from GVC) that might be enough for the Bwin shareholders to get comfortable with all the uncertainties. The 122p price is probably not enough, but it’s enough to get the Bwin board’s attention,” Ader told Reuters.
He added that the onus was on Bwin’s board to push GVC higher and invite 888 to reconsider its own offer.
Bwin’s shares were up 2.4 percent at 111.2p by 1454 GMT, when GVC’s share price was down 1.6 percent at 418p. ($1 = 0.9089 euros) ($1 = 0.6442 pounds) (Editing by Mark Heinrich and Greg Mahlich)