GVC Holdings Making Bid for Bwin.party

May 16th, 2015 | by Greg Shaun
GVC Holdings bwin.party takeover talks

GVC Holdings is the latest firm to be linked to acquisition talks with bwin.party. (Image: GVC Holdings)

GVC Holdings announced Friday that it had made a proposal to take over bwin.party Digital Entertainment, making them the latest company to declare their interest in buying the worldwide Internet gaming company.

Bwin.party has long been known to be seeking a buyer for some or all of its assets, saying last November that was in “preliminary discussions with a number of interesting parties regarding a variety of potential business combinations.”

Bwin.party is one of the world’s largest online gambling companies, known around the world for brands like Partypoker and the Bwin sports betting site.

Meanwhile, GVC Holdings is a relatively small player in the industry, perhaps best known for their partnership with William Hill in which the two companies acquired Sportingbet a couple years ago.

That would make this deal a “reverse merger,” as GVC is a far smaller company that would be purchasing bwin.party. At the moment, GVC operates the Casino Club and Betboo brands, as well as all Sportingbet operations outside of Australia.

No Guarantees of a Deal

However, the offer is simply that, and both sides have said that there are no guarantees that these talks would ultimately lead to a purchase.

“There can be no certainty that the submission of this proposal will lead to the company being selected as a proposed acquirer of bwin.party or, in turn, completing an acquisition,” GVC said in a statement to the London Stock Exchange, where both companies are listed. 

Bwin.party Confirms Talks

Because of the media speculation surrounding the GVC offer and the resulting increase in bwin.party’s stock price, bwin.party took the step of releasing its own press release to restate what it has been reiterating for months: that talks are ongoing with many parties.

“The Board of bwin.party reconfirms that it is continuing its discussions with a number of third parties and has received revised proposals (including from GVC Holdings PLC) regarding a variety of possible business combinations,” the company wrote. “There can be no guarantee that these discussions will result in any transaction being completed and a further update will be given in due course.” 

Bwin.party stock was up approximately 6.5 percent on Friday afternoon, while GVC Holdings saw a slight dip after the announcement, but recovered to run virtually unchanged from its opening price.

According to at least one analyst, there’s no particular reason to believe that GVC’s bid is particularly likely to be accepted by bwin.party.

“It’s hard to tell at the moment whether it will go through,” Panmure Gordon analyst Karl Burns said to Reuters. “It’s more unlikely than likely at this stage but it could be a very good deal for GVC.”

Any such deal would also have to be approved by GVC stockholders.

Consolidation Growing in Gambling Industry

Any merger involving bwin.party would continue the growing trend of consolidation in the worldwide gambling industry, as increasing regulation and taxes have caused companies to seek cost-cutting measures, such as finding synergies with former competitors.

In the case of bwin.party, the company is already the result of one such merger: in 2011, online poker firm PartyGaming and sports betting operator bwin combined forces to create the current Internet gambling giant.

However, the company has watched earnings fall in recent years, which has caused it seek out proposals from parties that might be interested in a purchase or merger.



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