GVC chief: The hard work starts now
Kenneth Alexander says combining GVC and bwin.party will be "challenging work" but will create a major player
GVC Holdings chief executive Kenneth Alexander says he isn’t underestimating the task of integrating the GVC and bwin.party businesses after pulling-off a sensational £1.1bn takeover of the struggling operator.
Speaking to eGaming Review this morning, shortly after the announcement of a recommended 130p per share offer, Alexander expressed his delight at having “won the day” in what was a long-running battle with rival bidder 888, but was under no illusions over what lies ahead.
“The hard work starts now,” Alexander said. “It’s going to be challenging work but also fun work and, potentially, lucrative work,” he added.
One of the crucial factors behind the bwin.party board’s decision to reverse its recommendation of 888’s offer and instead opt for GVC’s was the latter’s perceived ability to deliver 125m in cost savings, significantly more than 888 had highlighted.
Trading places
If such a figure is to be achieved a sizable reduction in headcount is expected and Alexander said the majority of savings would be extracted from a duplication in both firms’ sportsbook operations, with underperformers set to depart.
“The large group will combine the very best talent GVC and bwin have,” Alexander said. “There are a lot of very talented people and I’ve been impressed by the bwin people I’ve met so far so there will be lots of opportunities for employees on both sides of the business.
“If we talk about the trading teams in particular there are some very talented traders in bwin and I know for a fact, as I work with them daily, that there are some very talented sports traders at GVC and we’ll combine the two of them to give us the best trading team out there,” he added.
The firm plans to migrate its Sportingbet sportsbook to the bwin platform, which Alexander said offered greater scale and had benefitted from investment made over the past few years.
He also said the bwin bases in Vienna and Gibraltar would continue but would look at closing offices where the two firms both had a presence in the same location – although didn’t foresee a “wholesale closure of offices at this particular time”.
Divesting for the future?
However, despite the wider focus on cost cutting, the chief exec, who recently masterminded the turnaround of Sportingbet, said GVC offered more than just cuts and pledged to invest and grow each individual element of the bwin.party business, although hinted that some assets could be sold.
“I will have free reign to run the business as I see fit and the plan is to run all the individual parts of the business we acquire and grow them and develop them and improve them as much as we possibly can to create value,” Alexander said.
“However, if people are interested in some of the individual assets of the large group then I’m happy to have a discussion but the number one priority is to run all the parts of the business and grow them and development them,” he added.
There has been some suggestion that GVC has lined-up a deal to sell bwin.party’s poker and US-facing business to Amaya, who had featured on an earlier joint-ticket to buy bwin.party, a suggestion Alexander didn’t fully put to bed.
“We parted with Amaya on very good terms but there are no plans to do anything with Amaya in the future – we haven’t spoken to them since we went alone,” Alexander said. “But there is nothing in this deal that stops us from doing things in the future if both parties wish to,” adding that GVC would now apply for the necessary US licences.
Stamp of approval
The deal, which creates a firm with revenues of approximately 800m, is expected to complete either late this year or early next but first both sets of shareholder need to approve the takeover. And while the GVC backing is a given, bwin.party chairman Philip Yea this morning said its shareholders were evenly split between GVC and 888.
There has also been a number of instances of major bwin.party shareholders talking publically to the media about a preference for a deal to be made with 888, although Alexander dismissed any suggestion of a shareholder revolt.
“The GVC shareholders are 100% backing this deal and we don’t believe there are any issues with the bwin shareholders. We got a unanimous backing of the board and I don’t see any issues whatsoever,” Alexander said.
“All the people that may have said things in the press in the past will definitely be supportive of GVC,” he added.