GVC Nears Apparent Breaking Point in bwin.party Bidding War
The efforts of Gibraltar-based bwin.party to extract the maximum possible bid for the company’s struggling online-gambling assets may be nearing a conclusion after one of the two primary suitors involved, GVC Holdings PLC, clarified elements related to a sweetened bid earlier this month while issuing unofficial statements through various outlets that the latest offers may represent a final, “take it or leave it” offer for the bwin.party operations.
GVC, a primarily business-to-business operator best known in consumer circles for its SportingBet brand, has been locked in an informal bidding war over bwin.party with major European rival 888 Holdings PLC. The GVC offer made public on August 7th included an overall value increase from approximately 110p to 125.5 pence per share, even though the earlier GVC bid was already higher in face-value worth than a similar offer from 888 which the bwin.party board had recommended to its shareholders.
Reasons for bwin.party’s executive board to continue recommending the lower-valued 888 Holdings offer included higher leveraging within the GVC bid, the former inclusion within the GVC bid of partnership financing from Canada’s Amaya Gaming, parent company of PokerStars, and greater “synergies” between the bwin.party and 888 Holdings operations that could result in several bwin.party units being incorporated with little change into an expanded 888 operational family.
GVC has since jettisoned the Amaya Gaming partnership plan in favor of different secondary funding from private-equity group Cerberus Capital Management, which is believed to be more palatable to bwin.party executives. Despite backing from dissident bwin.party shareholders, including New Yorker Jason Ader, a decade of bad blood between the PartyGaming (now bwin.party) and PokerStars families may still factor into the equation.
Though today’s announcement from GVC (below) confirms that talks between the two companies are ongoing, apparent friction remains due to the bwin.party executive board’s refusal to remove or update the “preferred” label it gave to the earlier 888 Holdings bid.
Here’s the latest from GVC, as announced earlier today:
Update re Offer discussions
Further to the announcement made by the Company on 7 August 2015, in which the GVC Board confirmed that it had made a fully funded proposal to the Board of bwin.party digital entertainment plc (“bwin.party”) for the acquisition of the entire issued and to be issued share capital of bwin.party and which valued each bwin.party share at 25p in cash and 0.231 new GVC ordinary shares, the GVC Board is pleased to confirm that it continues to work closely with bwin.party and its advisers with a view to finalising the open aspects of its Proposal (as defined in the 7 August 2015 announcement).
Since the 7 August 2015 announcement, significant progress has been made and the GVC Board expects to be in a position to resubmit its Proposal to the bwin.party Board in the near future and on the same terms as set out in the 7 August 2015 announcement, having resolved the remaining open issues to both parties’ satisfaction. The Company will update shareholders accordingly.
The Proposal values bwin.party at approximately 124p per bwin.party share based on the closing GVC mid-market price on 21 August 2015 of 427p.
There can be no certainty that an offer for bwin.party will be made by the Company.