To paraphrase Mark Twain, rumors of the imminent sale of bwin.party have been greatly exaggerated. That’s the word from the company board itself, which has moved to quash rumors that it has hired Deutsche Bank AG (DBK) to help negotiate a sale of some or all of its assets. The source of the rumors is an article that appeared on the Bloomberg website this week, which claims that bwin is looking to be acquired in order revive its fortunes.
Despite being the leading player, in its partnership with the Borgata, in the New Jersey online poker market, and with over 40 percent of the market, 2013 was a bad year for bwin.party; the company saw revenues across all gambling operations fall by 19 percent, to â‚¬652.4 million ($888 million). It blamed several factors for the slump, including ISP blocking in markets such as Greece, the decline of the poker market in France and Italy, and the migration of its players to its new technology platform in 2012.
The Bloomberg article suggested that this, along with less-than-expected figures for the online poker market in New Jersey and the threat of PokerStars’ reentry into the US market following its acquisition by Amaya Gaming, has forced bwin.party to consider its options. The article said that two sources “with knowledge of the matter” had provided the author with the information for his article, one whom said that bwin.party would reach a decision within two months.
The bwin.party board, however, took less than a day to reach a decision that the rumors were unfounded and released the following statement:
“The Board of bwin.party has noted the recent speculation in the media regarding a possible break-up or sale of the company. Since his appointment as Chairman last month, Philip Yea has been working with the executive management team on ways in which the Group can increase shareholder value, however we can confirm that there are no plans to break-up or sell the company.”
Bloomberg quoted an interview with Martin Weigold, in which bwin Chief Financial Officer Martin Weigold spoke of “regulatory and competitive challenges in a number of markets” and the need to “divest non-core and surplus assets;” however, this was a tiny fragment of an interview, at a time when most of the statements coming from the company have been largely upbeat.
Bwin.party recently said it was pleased with its operations in New Jersey and would seek to consolidate and grow its position there while engaging with new, emerging markets. It was close to finding a partner in Pennsylvania, it added, and would seek to establish operations there, should the state legalize online poker with a willingness to share player pools with New Jersey.
“Having streamlined the shape and size of our business we now have the foundations to return our business to sustainable growth,” said chief executive Norbert Teufelberger.