888 wins acquisition poker over Bwin
19 July 2015
The gaming company 888 Holdings has won the takeover battle over Bwin.party. The winning bid of 888 was 900 million pounds, that are about 1.290 billion euros for Bwin and have to be paid in cash as well as in shares. The Gibraltar based company 888 commented on the agreement that this is a great opportunity to increase the amount of games while achieve cost savings. With this offer, the GVC Holding, a rival of 888 was outbid. In mid May the offer of 888 was still lower by 16%. The winning bid now amounts to 39.45 pence in cash and 0.404 in new 888 shares per Bwin share. Because of this deal the Bwin shareholders will own 48.9 percent of the merged company. Through the acquisition of the shares of 888 the stock price jumped by almost 8%, while Bwin shares remained unchanged. The management of 888 responded with regards to the deal that they expected that the merger will result in a saving of at least $ 70 million in the year after the end of fiscal year 2018. Pilip Yeah, Bwin chairman, also agrees with this and said that the merger of the two groups generates significant financial synergies for the benefit of the shareholders of both companies. He also said that 888 has one of the best management teams in the industry. He added that the deal is strategically compelling and that a saving of € 70 million through targeted synergies is no doubt, it is rather a conservative figure. The transaction is expected to be completed early next year.
Bwin.party owns some of the world’s biggest online gaming brands, including PartyPoker, PartyCasino and FoxyBingo. It originated from the merger of the Austrian Bwin Interactive Entertainment and PartyGaming in March 2011. It has 2,300 employees that are working in offices in Europe, India and the United States and it has an annual turnover of € 612 million.
A combination of new taxes on online gambling games in the world and the necessity to always invest larger sums in marketing and technology, caters for a consolidation in the sector. It is expected that this consolidation of the online gaming industry will continue in the coming years. Under the agreement, the Bwin boss Norbert Teufelberger will no longer be active in the expanded top management but will instead remain as an occasional consultant to the company.