888 loses out to GVC in takeover tussle for FoxyBingo owner bwin.party
- Credit: PA
FoxyBingo owner bwin.party has jilted suitor 888 Holdings in favour of a £1.1billion cash-and-shares offer from Sportingbet owner GVC.
888 appeared to have won the takeover tussle earlier this year when bwin agreed to its proposal, despite the higher valuation offered by its rival.
GVC sought to iron out potential snags in its offer while 888 continued to insist that its deal was of greater value, with a larger cash element.
Earlier this week, however, 888 submitted an improved bid as it became clear that it could to be edged out but GVC’s valuation of bwin at £1.116billion was still 12.9% ahead of the final offer from GVC, implying a gap of £128million.
The successful proposal also targets annual costs savings of 125m euros (£91m) per year compared with a 70m US dollar (£46m) target for synergies under the 888 offer.
Philip Yea, chairman of bwin, admitted the deal was likely to mean job cuts. Bwin employed around 2,300 people at the end of last year in Europe, India and the US while GVC employed around 500 people last year, according to its annual report.
Mr Yea said it had been a tough decision to choose between the bidders, saying: “It really has been a question of balancing some very fine judgments at the margin.”
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Bwin, which has some of the world’s biggest online gaming brands, including Partypoker and partycasino, first confirmed it was in takeover talks in May.
It was created from the merger of Austria’s bwin Interactive Entertainment and PartyGaming in March 2011.
The takeover drama comes in the midst of major consolidation in the gambling market, as Ladbrokes merges with the betting shops arm of Coral and Paddy Power links up with Betfair.
Mr Yea said today’s announcement was the end of a “long and necessarily protracted process” and appeared to shut the door on the possibility of 888 re-entering the fray.
He said: “We have given them due warning of our intention to switch. They have put forward a revised proposal in the knowledge that that was the case and now we are getting on with it.”
The chairman admitted there was “quite an even split” between those of bwin’s shareholders who backed 888’s offer and those who favoured GVC, but there was also a number who were happy to go with the board’s recommendation.
He said: “GVC have been very determined, have worked extraordinarily hard to catch up and to provide a credible plan that was more attractive.”
GVC chief executive Kenneth Alexander said: “GVC is the natural partner for bwin.party considering our strong sports betting and online gaming pedigree.
“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.”
GVC will fund the deal through a 400m euro (£290m) loan from investment firm Cerberus and a £150m share placing.