Bwin.party investor Jason Ader says GVC needs to increase its offer to have a chance of winning the bidding war against 888 Holdings.
Ader, who owns 5.2% of Bwin.party through his Spring Owl Asset Management, said GVC will need to further boost its offer for bwin.party by 14% to approximately 140p per share, in order to be in contention with 888 Holdings’ accepted offer.
“I would want a much bigger premium than 122.5 pence,” Ader told Bloomberg. “There are a lot of risks and uncertainties with this GVC bid.” By increasing its proposal from 110 pence, GVC has done “just enough to have a conversation with Bwin.”
GVC teamed up with Cerberus Capital Management and returned with a new proposal on Monday, which values bwin.party at £1b ($1.55b). Under the new offer, bwin.party shareholders would get 122.5p for each Bwin share, consisting of up to 25p in cash and the remaining in new GVC shares. The proposal would be financed via a €400m senior secured loan provided by Cerberus.
GVC had previously partnered with Amaya on a 110p per share offer on July 9, but bwin was uncomfortable with the complexity and uncertainty of the GVC/Amaya bid, and chose instead to recommend a 104.09p per share or nearly nearly £900m offer from 888.
Some Bwin shareholders had been dismayed by the board’s recommendation of the 888 offer and has encouraged GVC to return to the table.
Davy Research analyst David Jennings said that GVC’s current offer “is a real statement of intent” and bwin.party’s board will probably have no choice but to reconsider its acceptance of the 888 offer.