After being rumored for much of 2015, the position of bwin.party has finally come to light in the poker community. Earlier today it was announced that bwin.party Digital Entertainment and GVC Holdings would be entering discussions towards a final merger of the two companies.
According to Gaming Intelligence, GVC Holdings has made an initial offer of 110 pence per share of bwin.party stock. With the shares of bwin.party that are in existence, the resulting deal would be worth £900 million (or roughly $1.4 billion U. S. currency). If they are able to complete a deal with the shareholders of bwin.party, GVC Holdings would be putting together a strong competitor in the online poker and gaming industry.
GVC Holdings, after merging with William Hill in 2013, used that merger to acquire SportingBet.com and, as a company, holds licenses for online gaming in five different countries. The company handles around £1.5 billion in sports wagers per year and almost doubled their dividend shares after last year. In 2013, GVC Holdings paid its shareholders 28 €cents per share; at the end of 2014, that dividend share was worth 55 €cents. The one thing that GVC Holdings didn’t have, however, was an online poker room to take advantage of the game’s growth in the international market.
In a joint official statement from bwin.party made with the consent of GVC, the bwin.party Board of Directors reports that they have received the 110 pence bid. “The Board has considered the GVC proposal, the potential benefits of which it believes can accrue to bwin.party shareholders from a combination of the two companies and the commitment shown to resolving a number of transaction-related issues, and has determined to work with GVC so that they can finalize their offer over the coming days.” The statement does go on to say, however, that there is nothing formally completed at this time and further announcements would be forthcoming.
GVC is much more confident that a deal will be concluded. “Based on our experience with the successful SportingBet acquisition and restructuring, we believe that the potential combination of GVC and bwin.party would result in substantial financial and operating synergies and represent an excellent opportunity for both GVC and bwin.party shareholders,” Kenneth Alexander, the GVC Chief Executive Officer, said in a press release from the company.
Perhaps the most problematic thing about the proposed merger between the two companies are some of the particulars involved. According to the New York Times, GVC Holdings has stated that any offer to buy bwin.party would be jointly financed by GVC and Amaya Gaming, which already owns the dominant online poker room in the industry with PokerStars and another Top Ten online site in Full Tilt Poker. If GVC were to take over independently, there is perhaps thought that partypoker, bwin.party’s flagship operation, would be able to battle with Amaya’s online poker monolith. If it is a partnership between the two companies, that would put a crushing majority of the market in one company’s hands. It is also unknown what current and future operations in the United States, including bwin.party’s partnership with the Borgata in New Jersey’s online poker industry, would entail.
Over the past year, there have been rumblings in the poker community that bwin.party was looking to either merge with another company or be bought outright. Along with GVC Holdings, other companies such as 888 Holdings and Amaya Gaming were suitors that were thought to be looking to take the bwin.party prize. Those rumors were confirmed in November when bwin.party announced that it was in discussions with “a number of interested parties” regarding acquiring the company.
The announcement this morning has had a notable impact on the stock trading for both companies. As of today, bwin.party has seen an uptick to 101 pence per share on the London Stock Market, more than two pence above its close on Wednesday. Also traded on the London Stock Market, GVC Holdings is currently sitting at 449.5 pence per share, up over its 445 pence close from yesterday’s market.
