Bwin.party digital entertainment saw its shares leap on Monday after Canada’s Amaya Gaming officially joined the hunt to acquire the struggling UK-listed online gambling operator.
Speculation had already connected Amaya – owner of PokerStars and Full Tilt – to a potential Bwin.party acquisition last November. On Monday, multiple media sources reported that Amaya had teamed with UK-listed online gambling operator GVC Holdings, which on Friday had confirmed its interest in a reverse takeover of Bwin.party.
Amaya and GVC are reportedly setting up a special purpose vehicle (SPV) to conduct the acquisition, which would be a €1.5b cash and shares offer (the shares being newly issued GVC stock). Amaya and GVC are believed to have begun discussing the potential of a joint bid after each company made individual offers for Bwin.party.
The Telegraph reported that GVC would act as majority owner of the SPV but Amaya would have the option of taking immediate control of Bwin.party’s flailing PartyPoker division. GVC management would be tasked with restructuring Bwin.party’s remaining assets – a process expected to take around two years – after which Amaya may also snap up Bwin.party’s sportsbook.
GVC has been down this road before, having teamed with UK bookmaker William Hill on a £492m acquisition of online bookies Sportingbet in 2013. In the dismantling that followed, Hills took Sportingbet’s operations in regulated markets while GVC took the firm’s grey/black market operations. The acquisition was an unqualified success for GVC, which has gone on to post seven consecutive quarters of revenue growth.
Amaya has been developing an in-house sportsbook for PokerStars, which took its first sports wager earlier this year. While PartyPoker is but a shadow of its former glories, its addition would give Amaya further inroads into the US market. PartyPoker is the current online poker king in New Jersey’s regulated online gambling market, where PokerStars is still awaiting word on its licensing application.
Monday also saw rival 888 Holdings announce its own interest in acquiring Bwin.party. Peel Hunt analyst Nick Batram said Bwin.party was a takeover target because it had “massively underachieved” since Bwin and PartyGaming merged in 2011. Batram expressed concern that whichever firm eventually won the bidding war would have to tread carefully in executing a restructuring, noting that Bwin.party was where it was today because “it is effectively a failed M&A deal.”
Bwin.party’s stock closed out Monday’s trading up 8.6% to 108p, a high not seen since late January. This followed an 11% gain on Friday following GVC’s confirmation of its reverse takeover bid. GVC’s shares were basically flat at 461.5p while 888 was down over 3% to 164.2p. Amaya is currently down around 1% to C$32.32.
