Going with GVC Could Prove To Be Big for BWin

The takeover battle for Bwin.party’s online gambling company is proving to have more twists than any all-nighter blackjack session. In 2011 Bwin’s Austrian founders in a widely criticized deal merged their business with Party Gaming. After they received an elbow in the ribs from investor Jason Ader, Bwin.party then put the company up for sale last November. After a while they eventually received interest from two of their rivals. One company called 888, deals mainly with casino games, is a well established company. They have been turned around by the veteran leisure tycoon, Brian Mattingley. The other company is GVC Holdings. They are a vehicle set up under the deal maker, Kenneth Alexander who buys and merges online betting groups. Both of these companies will fund their offers with both cash and shares. This means that Bwin’s investors – this includes their boss Norbert Teufelberger – will have to do some hard thinking about whose stock they would prefer to own. 888 would seem to be the better option as the combined group could prove to be a strong player in casino games and sports. 888 is keen to expand in the sport arena. GVC has a fairly decent sports business setup in their Sportingbet but it’s not clear what it will do with Bwin’s casino operations. At first, they were going to team the bid with controversial PokerStars owner, Amaya. It made strategic sense. However, the Amaya connection seems to have put off the blue-chip investors. GVC is now going it alone. They say they will run the casino arm on their own. Some feel that it’s likely that GVC would break the casino stuff up and sell for cash. Mr Teufelberger’s crew have accepted the 888’s 104p a share offer. However sources in GVC have declared via the press that they were prepared to make an offer of 130p which has beaten any offer or future offer that 888 might make. The 130p offer sounds ‘too good to be true’. Some estimates say a 130p bid would mean that GVC will have to issue four times their current number of shares for investors to be able fund the deal, which means that Bwin shareholders will end up with 70% of the combined business plus 70% of the combined risk. If they go with 888, the ownership will probably be 50-50. Although Bwin have provisionally accepted the 888 offer, they are apparently now considering whether to switch their allegiance.