The £1bn bid battle for the gambling company Bwin.party intensified yesterday as the head of Sportingbet owner GVC said he was ready to fight off any improved bid from rival suitor 888 Holdings.
The fight will come to a head this weekend as Bwin’s board meets to consider a much higher £1.04bn offer from GVC, six weeks after unanimously recommending a cash-and-shares offer from 888 worth £870m. GVC’s offer has a smaller cash element but the Bwin board has declared itself satisfied with “key aspects” of its proposal.
The latest proposed marriage in a fast-consolidating sector comes just days after Paddy Power and Betfair announced a £6bn merger plan. Ladbrokes and Coral are also combining.
The stock market expects GVC’s bid to succeed, with Bwin’s shares trading around 10p above 888’s offer, worth 105p a share.
Kenny Alexander, GVC’s chief executive, said: “I think the proposition is far more compelling for Bwin shareholders than 888’s. We have far more expertise in sports and far more expertise in restructuring.
“One, I think we’ll do a better job of it. Two, we’re paying more money for it. I’m very confident we’ll win, actually.”
He added: “If they do bid greater than us, then I will come back – I think it is likely I would come back. I expect the biggest price to win.”
While 888 has promised cost benefits of at least $70m (£45m) a year by the end of 2018, GVC, backed by the US private equity firm Cerberus Capital Management, thinks it can deliver $150m by the end of 2017.
Brian Mattingley, 888’s executive chairman, said it was “not a foregone conclusion” that Bwin would go with GVC and insisted that his offer had “greater intrinsic value”.
But he added: “If the Bwin.party board decide to switch, then – and only then – will we consider our options. I’m not prepared to comment at this stage, apart from to say that I’m not going to have an easy bank holiday weekend.” Bwin will update the market on the takeover talks on Tuesday.
Mr Mattingley said he had not considered other potential deals if 888 missed out, but added that “there will be tactical acquisitions and other opportunities to develop our business”.
However, a failure to land the deal could put 888 itself back in play. It was a target of bookmaker William Hill earlier this year, but its Israeli founders and majority shareholders rebuffed the offer.
The market also digested interim results from both bidders as well as Bwin.party yesterday, although the company figures were overshadowed by the takeover manoeuvres.
Revenues rose 9 per cent at 888 in the first half of the year but underlying profits fell 17 per cent to $40.9m as the company took a $14.4m hit from the Chancellor’s new online-betting tax, as well as an extra $5.1m in European VAT costs. GVC reported higher revenues – up 15 per cent – as well as a 14 per cent rise in profits. Bwin’s revenues slipped by 6 per cent.
Shares in Bwin ended up 1.1p at 116.4p, while 888 was 1.25p higher at 162.75p. GVC closed up 13p at 448p.
