GVC’s risk to bid without Amaya paid off.
The battle for bwin.party, which operates Online Casinos and Online Poker sites including PartyPoker, which started last year in November is finally nearing its closure. This morning the board of bwin.party have decided to change their mind and instead of recommending 888 as favorable contender, they are now supporting GVC as the best bidder. After a long fight between two rivals 888 Holding and GVC that has been going on since May, chances are that GVC will win this one.
888 Started Off As Sure Winners
Even though Bwin was put up for sale in November last year things started to heat up in May this year when GVC decided to partner up with Canadian giant Amaya group and spoil plans of Gibraltar-based 888 Holding. GVC and Amaya outbid 888’s cash-and-share offer of around £900 but they still didn’t have the upper hand. Namely, Bwin’s board was suspicious about the stability of the partnership of GVC and Amaya, the latter of which was securing the bigger portion of cash. So the board gave their support to 888 Holding in July despite the fact that their offer was lower. 888 were confident that the existing cooperation with Bwin will count more towards creating a successful synergy than offering more money.
Persistence Paid Off
However, GVC was not ready to give up. They analyzed their options carefully and started working towards reaching a satisfactory proposal for Bwin. According to The Telegraph the last trump they decided to use was splitting with Amaya and taking over the burden of providing the cash part entirely on their own, thanks to a €400m loan from American private equity house Cerberus Capital Management. In numbers their offer came down to around £1.1 billion, that is around 130p per share, which is 12.9% higher than final Bwin’s share price on the stock market. Following this update, 888 have also revised their proposal but they also added some preconditions which bwin.party board obviously did not appreciate as this morning they have announced that they will advise the shareholders to vote for GVC. According to Philip Yea, chairman of Bwin, 888 were notified of this decision: “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.” Yea also added: “GVC have been very determined, have worked extraordinarily hard to catch up and to provide a credible plan that was more attractive.”