GVC edges out 888 for £1.1bn bwin.party takeover deal
Bwin.party board recommends GVC's 130p per share offer to create a firm with annual EBITDA of 270m
GVC Holdings looks set to acquire bwin.party in a deal valued at around £1.1bn after the bwin.party board last night unanimously recommended a 130p per share offer.
The Sportingbet owner said its combination with bwin.party, which was officially announced to the market this morning, would create an online gaming giant with annual EBITDA of 270m and a sportsbook generating turnover of 4.5bn.
The firm also said the deal, which is expected to complete in Q1 2016, would result in 125m worth of revenue and cost synergies and create a platform which would provide “further consolidation opportunities”.
The decision of the bwin.party board may well have brought to end one of the most protracted takeover battles in egaming history with GVC having gone head-to-head with rival bidder 888, which until last night had been bwin.party’s preferred option.
888 still have the option of improving its latest 115p per share offer, however, that scenario now seems unlikely after its COO Itai Frieberger yesterday told eGaming Review that his firm would not be drawn into a bidding war.
As part of the deal, bwin.party shareholders will receive 25p in cash and 0.231 new GVC shares for each bwin.party share held, although a mix and match facility will be made available for those that would prefer to vary the proportion of cash and paper.
The majority paper deal will mean bwin.party shareholders will assume 66.6% of the combined firm.
GVC shares are currently trading on AIM, however, the firm said it would now apply to be listed on the main market of London’s Stock Exchange on completion of the deal.
City analyst Nick Batram of Peel Hunt said the deal represented a “great coup” for GVC and that the 125m cost saving figure, which was almost double that of 888’s, would have been a crucial factor in the bwin.party board’s decision to switch sides.
“Whilst the amount of equity involved means it wasn’t a straight shoot-out on price, the combination of the gap in value (13%) and GVC’s target synergies (125m) was too great for bwin to resist,” Batram said.
Read more news and analysis on the GVC-bwin.party deal:
Analysis: 888 must get back in the M&A mix – and fast
888 set to bow out of bwin.party acquisition race
Bwin.party chairman: GVC sportsbook combination key to decision