Bwin.party, the sports betting, casino and poker operator, has formally accepted a £1.1 billion ($1.6 billion) takeover bid from GVC Holdings.
Despite initially accepting a lower offer from 888 Holdings back in July, bwin.party was put off from finalizing the deal following a constant stream of pressure from GVC.
That pressure reached a crescendo last week when GVC put in an increased offer of 1.97 per share.
This offer, in conjunction with more favorable future conditions, was enough to sway the bwin board to side with GVC and release an official statement on Friday.
“The boards of GVC and bwin.party are pleased to announce that they have reached agreement on the terms of a recommended offer pursuant to which GVC will acquire the entire issued and to be issued ordinary share capital of bwin.party,” read a joint statement from GVC and bwin.party.
To help finance the £1.1 billion ($1.6 billion) takeover, GVC will utilize around £400 million ($600 million) in funds from Cerberus Capital Investment, a private investment firm based in New York.
In addition to this capital, GVC has also stated that it will embark on a £200 million ($300 million) fundraising initiative that will include placing new shares with institutional investors and issuing new GVC shares.
Beyond the financing of the deal, GVC has also outlined a £91 million ($138 million) per annum cost savings plan for bwin.party. The first step in the process will be a migration of GVC’s sportsbook assets to bwin’s platform.
This merger will help in reducing staffing costs and opening up new branding and investment opportunities.
Moreover, GVC will terminate current sponsorship deals and take advantage of CRM (customer relationship management) systems and previous investments in both brands.
Overall, on completion of the takeover, GVC has stated that it will look to introduce an “enhanced entrepreneurial culture” to bwin.party.
Following the news that bwin.party was ready to accept GVC’s offer, the company’s shares experienced a slight increase on Friday before dipping by 0.8 percent. Similarly, GVC’s share price dropped by 3.9 percent after the deal was made public.
In contrast, after formally withdrawing its bid citing a lack of value in upping its original offer, 888’s share price rose. Although Friday’s early trading price quickly fell, faith in the company gradually strengthened during the day and before the close of play it had risen by 3 percent.
It’s now expected that GVC will look to increase its services in new markets, while 888 will seek out new potential investment opportunities.