Five consequences of a deal: Bwin-PartyGaming merger

SPECULATION around a Bwin-PartyGaming tie-up is not going away following PartyGaming’s strong fourth quarter results, with “active discussions” reported between the two.

A merger between Bwin, the biggest publicly listed egaming company with a market cap of around €1.4bn, and £1.1bn-rated Party could be transformational for the industry.

The complexities involved in achieving a merger of this scale led PartyGaming chief executive Jim Ryan to warn against speculation. “These things are complicated and subject to many variables.”

1) The tie could provide a spur to other long-mooted industry transforming deals in the sector between 888, Sportingbet, Unibet, Ladbrokes, and also consolidation between poker networks as they look to acquire the scale, reach and liquidity to compete.

2) Party has been seeking a sports betting platform for years despite acquiring Gamebookers in 2006. The merger would enable it to realise its publicly stated aim to be top three in its four main verticals, following its buy of bingo business Cashcade last year.

3) A merger would cement Party’s position as the third largest poker business, but the combined liquidity of 8,200 average cash players boasted by a Party-OnGame tie would still lag behind the 16,600 of second-place Full Tilt, according to monitoring site Pokerscout.

4) Bwin’s OnGame network combined with its recently announced B2B push would complement the inroads Party has recently made into this space.

5) While Bwin’s higher valuation would presumably make it the senior partner in any merger, speculation is around who would head up the new entity and if an exit for Bwin co-founders Norbert Teufelberger or Manfred Bodner could be on the horizon.