In what has been a long-rumored business deal in the poker community, Reuters India is reporting that the prospective merger between online gaming giants bwin and Party Gaming may occur this summer.
In a Format magazine article cited by Reuters, unnamed officials involved in the discussions stated, “The merger should be wrapped up this summer,” and added that the negotiations have reached an “intensive phase.”
While representatives of bwin or Party Gaming made no statements regarding the potential merger, it has been a long-running story that the two companies have been eyeing each other. Rumors have been floating around the poker industry since 2009 and have sparked discussion in the poker world about the industry’s first “mega-company.”
Party Gaming has been quite active in the merger and acquisition route over the past year. Last year, the parent company of PartyPoker reached a deal to purchase Cashcade, which owned FoxyBingo and added a significant market share to Party’s bingo site, PartyBingo. Party Gaming also made what some consider a significant move to its possible reentry into the U.S. market when it purchased the World Poker Tour (WPT) from the now defunct World Poker Tour Enterprises in November 2009.
Over that time span, the discussions of even further consolidation of the poker industry have brewed between Party Gaming and bwin. In December, after talks heated up, both bwin and Party Gaming officials squelched such speculation with public statements to their shareholders and the media. While many in the financial community thought a deal would happen before Christmas, the statements seemed to put on hold the speculation for awhile.
“The board of Party Gaming confirms that it is continuing to hold discussions with a number of companies in the gaming sector regarding potential consolidation opportunities,” the company said in a statement to the London Stock Exchange that was reported by the British newspaper The Guardian. “As all such discussions remain at a preliminary stage, there can be no certainty as to whether or not such discussions will result in any form of transaction.” In Format during the same time period, bwin Chairman and largest shareholder Hannes Androsch was quoted as saying, “Talks are going on, but we don’t know yet whether they will succeed.”
A merger of Party Gaming and bwin would result in the creation of an online gaming organization that would be worth nearly $4 billion. Party Gaming, with its still successful PartyPoker, would add on an online sports betting arm in bwin that it has lacked since its creation as well as customers from bwin’s online poker operations. Neither PartyPoker nor the Ongame Network allows American action.
The rumored merger has surprisingly not had an effect on either company’s stock price. Party Gaming finished Friday down 5.2 pence to 312.1 pence on the London Stock Exchange and bwin Interactive Entertainment ended trading on the Vienna Stock Exchange Friday down €0.6 to €41.2. When initial rumors floated regarding the merger in December, both companies saw a noticeable increase in their stock share prices.
