888 beats GVC Holdings in race to acquire bwin.party
Operator clinches "transformational" £898m deal for the Gibraltar-based firm despite offering a lower price than rival bidder GVC
888 Holdings has beaten GVC in the race for bwin.party after this morning announcing an agreement to acquire the beleaguered operator in a deal worth nearly £900m.
Under the terms of the agreement 888 will pay 104.09p per share, less than the 110p proposed by GVC last week, for the Gibraltar-based operator via its 888 Acquisitions subsidiary and will finance the cash consideration through a US$600m term loan credit facility.
In an RNS announcement this morning, both 888 and bwin.party said the combined group would create significant cost synergies to the tune of over US$70m annually by the end of 2018 and was considering a move to spin-off bwin.party’s in-house technology business into a separate entitty.
Bwin.party said its directors believe 888’s offer providers “a higher degree of certainty” for its shareholders when compared to GVC’s bid, despite the latter offering a “modest incremental premium”.
888 chairman Brian Mattingley hailed the deal as “transformational” for the operator. “The Enlarged Group will benefit from significantly enhanced scale, an improved product offering as well as significant cost and revenue synergies,” he said.
“888’s management have a well-established track record of delivering outperformance since 2011 and we look forward to working with our new colleagues to create a global leader,” Mattingley added.
Upon completion of the deal bwin.party CFO Martin Weigold and non-executive director Liz Catchpole will both join the 888 board, while long-serving CEO Norbert Teufelberger will work with the group on a consultancy basis.
“Bringing our two groups together will generate substantial financial synergies for the benefit of both sets of shareholders and create a strong player with the breadth of product, brands and geographic coverage to grow faster than either business would be able to achieve stand-alone,” bwin.party chairman, Philip Yea, said.
“Drawing upon a wealth of experience accumulated over the past few years, our management team looks forward to working with new colleagues to realise the considerable potential that this business combination presents,” he added.
Read our analysis on the deal here.
Read our exclusive interview with 888’s COO Itai Frieberger.