Global technology giant Google is reportedly mulling the acquisition of pan-European online gambling operator Bwin.party digital entertainment. This Is Money’s Geoff Foster reported rumors that Google was eyeing a takeover of the struggling Bwin.party at a value of 200p per share, nearly twice Thursday’s closing price of 109p. (Guess Bwin.party CEO Norbert Teufelberger knew what he was doing when he bought an additional 204k shares in his company in May.)
Regardless of its accuracy, the rumor may temporarily arrest Bwin.party’s sliding stock, which is down nearly 5% over the past two days and down significantly from its year-to-date peak of 156p in March. The slide is the result of a string of dire earnings reports that prompted Peel Hunt analyst Nick Batram to warn that Bwin.party’s management was running out of chances to put things right.
Batram’s criticism was amplified following the recent launch of the revamped Party Poker software, with its new emphasis on social connections among players. The decision to refocus Party Poker’s attention on recreational players was a well-intentioned (if overdue) move, but the rollout has been plagued by technical glitches – including the popular “feedback form loop crash” – that have left players in anything but a Party mood. In its first week of life, the new Party’s player traffic fell every single day.
On Thursday, a Party rep informed the 2+2 forums that the company had upgraded its servers in a bid to fix some of the stability issues the previous two software updates had failed to resolve. Poker News Daily spoke for many frustrated players by describing the rollout as a “minor disaster.” The mistakes are magnified by the weight of expectation Bwin.party management had placed on the software launch. Throughout the long decline in Party Poker’s player pool and contribution to group revenue, Bwin.party promised that the new software launch would right the ship, but it seems that ship has sailed.
If the acquisition is going to happen, Google is reportedly set on doing it before the November 23 launch of Bwin.party’s online gambling operations in New Jersey, the early results of which might help bump up Bwin.party’s price. Assuming its foreign entanglements don’t prevent the company from receiving a license, Bwin.party will operate in New Jersey under both the Borgata and Party Poker brands as part of its three-way US partnership with Boyd Gaming and MGM Resorts, co-owners of Atlantic City’s market-leading Borgata casino.
Perhaps Google plans to use Bwin.party as a test case, to see if the people who designed Google’s self-driving car can pull off the world’s first self-directed online gambling firm. As Batram suggested, given the company’s current state, what’s the worst that could happen?