Feeling flush
Bwin bidders look likely to up the ante
THE battle to buy online gambling firm Bwin.Party was expected to intensify this weekend amid claims that 888 could be forced to raise its £900m offer to see off GVC.
Bwin accepted a cash and stock offer from 888 in July but has spent recent weeks working with GVC to iron out issues with an improved £1.03bn proposal made by the smaller suitor this month.
Bwin invited GVC this week to present its best formal offer, and has promised to update the market on Tuesday, following the bank holiday weekend.
Yesterday, as it reported interim results, Bwin said the bid from 888 at 104.7p represented a 24.8pc premium to the average share price over the three months before it was revealed. There was no change to the board’s recommendation that shareholders accept the deal.
The rival approach by GVC – valued at 126.4p at today’s prices and made up of 25p in cash and 0.231 new GVC shares for each Bwin share – is higher. GVC says it also offers greater synergies than 888’s offer, which is made up of 39.5p in cash and 0.44 shares in the company.
Over the six months to the end of June, Bwin said revenue fell 6.5pc to €296.5m (£217.3m) compared with the year before, reflecting less betting than during last year’s football World Cup. The company posted a €3.1m pre-tax profit, following a €110.5m loss last year.
GVC chief executive Kenny Alexander said yesterday: “I think we’ll do a better job of it. We’re paying more money for it. I’m very confident we’ll win. If they [888] do bid greater than us, then I will come back.”
Meanwhile, Brian Mattingley, 888’s executive chairman, said he was confident his company would win out over GVC, claiming the larger cash element of his offer “highlighted its strength”.
“If we wanted to we could increase the price of our offering by flooding the market with shares like our competitors are,” Mr Mattingley said. “Naturally Bwin’s management must look at all offers and ultimately the decision is down to shareholders but we believe our offer is compelling.”
He defended the synergies of “not less than $70m” his offer promised, saying these were lower than the €135m suggested by GVC because “ours are synergies, not cost savings. You can’t strip out €135 of costs without destroying value.” He refused to be drawn on whether 888’s current offer was its final one, saying it would be reviewed if it was unsuccessful.
888 also unveiled half-year results, posting a 2pc slide in revenue to $220m (£143.2m) and a 41pc slump in pre-tax profit to $20m.
GVC also reported first-half results yesterday, posting revenue up 15pc to €120.9m, but pre-tax profit down 4.7pc to €16.7m. Kenneth Alexander, GVC’s chief executive, said that his company remained in the running to buy the business.
Simon Davies, a Canaccord analyst, said: “My gut feeling is that GVC will raise its offer [to confirm its August 7 proposal] and 888 will improve their offer to ensure they emerge victorious.”