888 Holdings made a surprise play for bwin.party, the iGaming operator behind partypoker, which will now become part of the 888 corporate family by the start of 2016.
Although 888 had previously expressed interest in bwin, it was assumed by many last week that that bid had been all but eclipsed by an opposing one from GVC Holdings and Amaya Inc.
In fact,the race to acquire bwin.party had been hotly contested throughout this year, with a number of interested players showing their hands.
At the start of 2015, William Hill put in a $1.172 billion bid for bwin.party, an offer that was subsequently rejected. After watching William Hill’s bid play out, 888 and GVC Holdings joined the action, with the latter putting in a cash and stocks offer worth $1.4 billion.
This bid by GVC Holdings was also rejected in favor of a similar offer by 888 Holdings. Although reports suggest 888’s bid was slightly less than the $1.4 billion offered by GVC, the terms appear to have been more favorable for the share holders of bwin.party.
Under the terms of the deal, bwin.party’s transition will be completed by the start of 2016 and its shareholders will own 48.9 percent of the new company. In addition to these conditions, Liz Catchpole and Martin Weigold, two senior figures at bwin.party, will join the 888 board.
However, bwin.party’s chief executive, Norbert Teufelberger, won’t be joining Catchpole and Weigold. Although he will provide an advisory role, the former head honcho will no longer have a direct say in the direction of bwin.party.
After news of the deal broke on Friday, the industry began to take stock of the new dynamics and contemplate the prospect of a new iGaming powerhouse rising up to challenge Amaya Inc., whose Rational Group is parent to PokerStars and Full Tilt.
Aside from the internal benefits of 888 taking control of bwin.party (the new deal will allow the newly formed entity to cut costs and launch a raft of new innovations), the move could benefit the industry as a whole.
With 888 Holdings now in control of more assets, more player data and a greater global reach (especially in the US), there’s a strong chance it could challenge Amaya’s dominance at the top of the poker tree.
While the new entity may not be able to overtake Amaya, aka PokerStars, in the near future, it should be able to make the corporate environment more competitive, which means players may start to find better deals coming their way.
This sentiment was echoed by 888’s executive chairman Brian Mattingley, who believes the new deal is a chance for his company to reaffirm its strength and build a stable operation in the coming years.
“This is a transformational opportunity for 888 in the consolidating online gaming industry, which is expected to grow significantly over the coming years.”