Shuffle Master and bwin.party digital entertainment have come to a mutual agreement not to progress with the transfer of the Ongame Network. A “definitive agreement” was signed back in March for a deal that would have cost Shuffle Master €19.5 million up front then up to €10m over the following five year period. The announcement, given by bwin.party, states: “The sale of surplus assets, including Ongame, remains a core part of bwin.party’s strategy. bwin.party is re-engaging with other third parties that have expressed an interest in acquiring Ongame.”
There are a couple of reasons why this marriage could have broken down before it was consummated and looking back at the original offer news is where to start. When the deal was first announced, the “definitive agreement” was contingent on certain conditions being met. The one condition that was revealed back then involved the receipt of certain regulatory approvals. Now, whilst all we’re doing is speculating, did Nevada nudge Shuffle Master to inform them they could GTFO if they had anything to do with Ongame, as it’s not up to Nevada’s standards?
OnGame, unfortunately for anyone looking to buy it, didn’t sign a PartyGaming-style “sorry we let U.S. players in” multi-million dollar settlement with the DOJ. It subsequently leaves uncertainty for the buyer as to whether the DOJ will one day decide to bust the door open and demand some cash to keep quiet. If OnGame had already paid a settlement then Shuffle Master wouldn’t have to entertain the prospect of buying a new door – unless the old one gets wood-worm.
Secondary to this is the fact that Shuffle Master’s chief executive, Gavin Isaacs, said in an interview back in February the firm prefers joint ventures. He said this before the deal for OnGame had been mooted and there’s little to suggest this was the case meaning the more plausible of the two reasons is the former. It could have something to do with the deal being called off though.
Realistically bwin.party now faces the prospect of giving up OnGame for a fair chunk less than the €20-30m that analysts had predicted last year.
