UK-listed online gambling operator GVC Holdings is being sued by a Canadian company over an aborted joint venture.
On Tuesday, the Times reported that 37 Entertainment (37E), a Montreal-based sports and entertainment consultancy run by sports writer Doug Honegger (pictured), had filed a petition seeking “declaratory judgment” in the London Court of International Arbitration over a failed bid to launch two Sportingbet-branded websites targeting Canadian punters.
According to the petition, 37E claims the parties had reached an understanding last year regarding the launch of the two sites; one to target the province of Quebec while the other dealt with the rest of Canada. 37E would handle marketing, GVC would provide all gambling services and the two parties would share equally in the proceeds, which 37E claims GVC had estimated to be in the “hundreds of millions of dollars.”
No final contract was ever signed, but 37E claims that the parties had agreed on “all essential terms” and GVC had provided an “overwhelming number of written and verbal commitments” that the deal would go forward. 37E claims GVC went as far as to provide 37E with trading reports, financial statements and internal info regarding GVC’s Canadian-facing business.
37E says the deal began to unravel in February, as GVC kept finding reasons to delay putting pen to paper. 37E claims that while GVC continued to insist that all was well, “new excuses were coming fast and furious” as to why GVC wouldn’t take the final step. In June, GVC officially pulled the plug on the venture.
A GVC spokesman called 37E’s claim “without merit” and denied that any formal agreement had been reached between the parties. GVC said it explores a lot of potential deals but “not all opportunities reach maturity.”
BWIN.PARTY BID COOKED 37E’S CANADIAN GOOSE?
37E alleged that the failure of its deal was likely related to “purely strategic reasons” related to GVC’s efforts to acquire Bwin.party digital entertainment. With support from Cerberus Capital Management, GVC has made a £1.03b cash-and-shares offer to acquire the struggling Bwin.party, although rival 888 Holdings appears to have beaten GVC to the punch.
Or have they? Late last week, Reuters reported that financial underwriters Barclays and JP Morgan had put a hold on some of 888’s loan financing until the merger fog cleared. A banking source claimed it was “hard to get investors to commit to a deal … they are unsure will happen.” The source claimed the loan would be relaunched once there was more clarity surrounding the acquisition.