Online gaming takeover battle on cards
LONDON-LISTED online gaming company 888 Holdings has offered to buy bigger rival Bwin.Party Digital Entertainment, setting up a potential $1.5 billion (R17.6bn) takeover battle with GVC Holdings.
Smaller sports betting and gaming company GVC Holdings confirmed on Friday that it had bid for Bwin, which said in November that it was in talks with a number of parties.
Bwin shares gained as much as 13.12 percent, catapulting them to the top of the FTSE250 Midcap gainers list. The shares traded 8.5 percent higher at 107.9 pence at 2.53pm in London.
“I certainly think it’s realistic to think you would get an offer pitched at the 115 pence (R21.26) per share level. Possibly higher if you’ve got multiple bidders,” Canaccord Genuity analyst Simon Davies said. That price would value Bwin at around £950 million.
Shares in 888 – which did not disclose a deal value but indicated it was a cash-and-stock offer – fell as much as 4.27 percent and were among the biggest losers on the London Stock Exchange. Its market capitalisation is around £600m.
Consolidation in the gambling industry has been anticipated as higher taxes and tougher regulations in Britain and other major European markets have been hurting companies.
Analysts also named Canada’s Amaya Gaming, which last year bought gambling sites PokerStars and Full Tilt Poker, as another possible bidder.
888, which offers casino, poker and bingo games and is expanding its sports betting business, said in March that it was on the hunt for acquisitions as it had enjoyed strong growth with more gamblers moving online.
“There’s no doubt that 888 have got much more in the tank in terms of the synergy benefits of such a transaction… So I think if 888 are serious, it would be very difficult for GVC to succeed in any offer,” Nick Batram, an analyst at Peel Hunt, said.
Gibraltar-based 888, which ended talks on a takeover by William Hill earlier this year, said yesterday that it saw “significant industrial logic” in combining with Bwin.