Bwin and Sportingbet owner GVC holdings have agreed on the terms of a £1.1bn (€1.5bn, $1.67bn), takeover from the latter. Bwin.Party, itself the result of a 2011 merger of PartyGaming and Bwin Interactive Entertainment, has been the subject of a betting war between GVC and online betting giant 888.
Philip Yea, the chairman of Bwin – which has been up for sale since November 2014 – has backed the offer, saying that GVC would be the natural partner for the company to team up with, underlining Bwin's strength as an online sports betting company.
He told investors: "Sports betting is in our DNA, and leveraging GVC's experience of successfully acquiring and restructuring online gaming businesses – notably Sportingbet in 2013 – we look forward to merging the two operations to deliver long-term value for combined shareholders. GVC has been working closely with Bwin.Party's management, and has identified many talented individuals with whom it looks forward to working to ensure the future success of the enlarged business."
The acceptance of the offer is a slap in the face for GVC's rival 888, which put a £900m offer on the table in July, increased to £1.1bn a month later following competition from GVC. Bwin had originally accepted the 888 offer, but the company – seemingly keen to merge with GVC – urged the Sportingbet owner to consider putting its best offer on the betting table against 888.
The betting war has been going on for months and has seen both parties hike offers in order to secure an acquisition. The merger talks are part of a wider M&A activity within the betting industry, which can be attributed to the higher taxation of gambling companies, according to Scott Longley, editorial director at strategic gambling industry consultancy Regulus Insights.
He told IBTimes UK: "[The M&A movements] have to do with trying to gain scale in a market where it is harder to make a profit – and that in turn has to do with national regulation. That has forced more costs and more tax on to online gambling operations, and in response to that, they are seeking to gain scale to try and overcome those challenges."
GVC offers 25p cash per share in addition to almost a quarter of a GVC share. The buying company's share price plummet by more than 2.8%, while Bwin saw its share price jump by 1.13%.