FoxyBingo owner bwin.party has jilted suitor 888 Holdings in favour of a £1.1bn cash-and-shares offer from Sportingbet owner GVC after a protracted takeover wrangle.
888 appeared to have won the battle earlier this year, despite the higher valuation offered by its rival, when bwin agreed to its proposal. But GVC doggedly pursued its goal, ironing out potential snags in its offer.
888 continued to insist its deal was of greater value, with a larger cash element, and submitted an improved bid earlier this week as it became clear that could be edged out.
But GVC’s valuation of bwin at £1.116bn was 12.9% ahead of the final offer from bwin. The successful proposal also targets annual costs savings of €125m (£91m) a year compared with a $70m (£46m) target for synergies under the 888 offer.
Philip Yea, chairman of bwin, admitted it was likely to mean job cuts. Bwin employed about 2,300 people at the end of last year in Europe, India and the US. GVC employed about 500 people last year, according to its annual report.
Yea admitted it had been tough to choose between the bidders, saying: “It really has been a question of balancing some very fine judgments at the margin.”
Bwin – which has some of the world’s biggest online gaming brands, including Partypoker and partycasino – first confirmed it was in takeover talks in May.
It was created from the merger of Austria’s bwin Interactive Entertainment and PartyGaming in March 2011. The takeover drama comes in the midst of major consolidation in the gambling market, as Ladbrokes merges with Coral and Paddy Power links up with Betfair.
Yea said Friday’s announcement was the end of a “long and necessarily protracted process” and appeared to shut the door on the possibility of 888 re-entering the fray.
He said: “We have given them due warning of our intention to switch. They have put forward a revised proposal in the knowledge that that was the case and now we are getting on with it.”
The chairman admitted there was “quite an even split” between bwin shareholders who backed 888’s offer and those who favoured GVC, but there was also a number who were happy to go with the board’s recommendation.
He said: “GVC have been very determined, have worked extraordinarily hard to catch up and to provide a credible plan that was more attractive.”
GVC chief executive Kenneth Alexander said: “GVC is the natural partner for bwin.party considering our strong sports betting and online gaming pedigree.
“Sports betting is in our DNA and leveraging GVC’s experience of successfully acquiring and restructuring online gaming businesses, notably Sportingbet in 2013, we look forward to merging the two operations to deliver long-term value for combined shareholders.”
GVC will fund the deal through a €400m loan from investment firm Cerberus and a €15m share placing.