Bwin.party In “Further Discussions” With Possible Buyers
More of the same, but now more serious? Just months after acknowledging that it had been approached by suitors to purchase the company, online gambling firm bwin.party digital entertainment plc has once again confirmed that it has been in talks to sell all or part of its business and it appears the seriousness of those talks is escalating.
Philip Yea, non-executive chairman of bwin.party told the Financial Times on Wednesday that the company was in “further discussions” with multiple potential buyers, though he would not divulge the names of the interested parties (no pun intended) nor the number of offers that have been made.
“We’re testing them against each other and against business as usual,” he said. “These processes take whatever time they take.”
Shares of bwin.party (BPTY.L) spiked in early morning trading Wednesday, opening at 77.90p and quickly jumping to 80.60p within minutes, an increase of 3.5 percent. The stock price topped out at 81.55p that morning, but eventually closed up only slightly from the opening, at 78.70p per share.
The company’s stock price did continue to climb during the next couple days, though, finishing out the week at 82.15p, about 5.5 percent higher than it opened on Wednesday.
As mentioned, bwin.party has done this dance before. In November, the company confirmed that that it was in acquisition talks after rumors started swirling, saying:
Further to recent media speculation regarding a possible bid for bwin.party, the Board of bwin.party confirms that it has entered into preliminary discussions with a number of interested parties regarding a variety of potential business combinations with a view to creating additional value for bwin.party shareholders. Such discussions may or may not result in an offer being made for the Company. However, as all such discussions remain at a preliminary stage, there can be no certainty as to whether or not they will result in any form of transaction with any party.
Further announcements will be made as and when appropriate.
At the time, bwin.party’s stock price was around 100p, but had jumped to around 125p on the rumors, forcing the company to make some sort of announcement. The Financial Times’ “Alphaville” investment blog reported that Amaya Gaming was one of the interested parties and had offered a whopping 145p per share for the company. Amaya was and is the owner of PokerStars, the world’s largest online poker room, and Full Tilt Poker. It is no stranger to ambitious acquisitions, as it stunned the online gambling world last June when it purchased Oldford Group Limited, parent of Rational Group, which is in turn parent of PokerStars and Full Tilt, for $4.9 billion.
The Financial Times also believes William Hill and GVC Holdings, owner of Sportingbet, are two of the suitors for bwin.party.
Bwin.party, parent of the long-standing online poker brand partypoker, announced in December that it was looking to divest itself of Win, the company’s social gaming business, but no further news has developed on that front.
The overall company has been struggling financially. It recently reported 2014 revenues of €611.9 million, down from €652.4 million the previous year. It had an operating profit of €51.9 million in 2013, but lost €97.9 million in 2014. Its poker unit was the biggest problem, as its revenues fell 29 percent year over year, from €114.6 million to €81.7 million. Sports betting, bwin.party’s largest business, was up slightly, from €235.8 million to €237.1 million.
In a press release, bwin.party Chief Executive Officer Norbert Teufelberger wrote:
We have made solid progress this year in growing our share of revenues from nationally regulated and/or taxed markets, increasing our mobile footprint and reducing our cost base. However, the full year impact of ISP blocking in Greece coupled with the structural decline of regulated poker markets in Continental Europe affected our overall financial performance for the year.
Having announced our shift to a label-led approach in August, we are now accelerating our transformation. This programme is already improving our operational effectiveness and customer focus, both of which are key drivers of our long-term financial performance, with particular opportunities flowing from the commercialisation of our technology through our new Studios business unit.
That ISP blocking in Greece was buffered a bit by increased betting activity surrounding the World Cup, but bwin.party will not have the World Cup to fall back on in 2015.
Of bwin,party’s key performance indicators, only yield per active player day increased from 2013 to 2014. Active player days, daily average players, and new player signups, were all down double-digit percentages.
On the poker side, the company did see its revenue from mobile/touch devices rise to make up 10 percent of total poker revenue, up from 5 percent in 2013. As companies continue to try to control the mobile market, that improvement in performance should at least be encouraging.