888Holdings After Failed Bwin Bid: Still Looking for Strategic Acquisitions

After the Bwin bidding battle between 888Holdings and GVC finally ended last week with GVC emerging as the triumphant bidder, 888Holdings disclosed that the company is still looking for strategic acquisitions.

The Chairman of 888Holdings Brian Mattingley told the Financial Times (FT) that the failed Bwin bid did not make them, in anyway, vulnerable to becoming the target of a buyout or takeover deal. Although Mr. Mattingley is aware that consolidation has become the most viable solution in battling the effects of the taxes imposed by UK’s new gambling regime, he told the FT interviewer that they intend to rise to the challenge.

He added that the company still has plans of participating in the ongoing consolidation process. He said they are still looking for practical and strategic acquisitions aimed at building 888Holding’s sport betting segment in particular. Mr. Mattingley asserts that they will not be cast aside, since they have already proven that 888 has the critical mass.  Neither is the company a loser after the Bwin board made a complete reversal of its original decision to endorse 888Holdings, nor a one-trick pony that has limited expertise and abilities.

Earlier this year, 888Holdings had rejected a takeover deal offered by leading bookmaker William Hill. The deal though, would have strengthened William Hill’s position in the online gambling market, as the UK bookmaker would have gained control of one of the leading online gaming platforms. However, the Shaked family, which owned about 60 percent of the company, wanted a bid higher than the £700 million offered by William Hill.

However, with the recent turn of events, and following the consolidation agreements between Ladbrokes and Gala Coral, and that of Paddy Power and Betfair, all eyes are on William Hill since the combined groups will have a larger share of the online gambling market and their operations enhanced by the synergies created by the merger deals.  Now that 888Holdings failed to win the Bwin acquisition battle, many are wondering if a William Hill-888 Holdings merger would eventually push through.  After all, William Hill will gain, not only from having control over 888’s proprietary platform, but  also from the resulting cost-savings of reducing money paid to third-party gaming platform providers.

Readers will recall that last month, at the height of the bidding war between GVC and 888, investment institutions JP Morgan and Barclays had put on hold the syndicated loan that would have funded 888’s acquisition of Bwin. As it was, the investment banks wanted more clarity regarding the Bwin deal, as the latter began re-considering its options after GVC upped its offer to $1.6 billion. As the turn of events has it, 888Holdings decided to withdraw rather than put forward a counter-bid.

According to the 888 CEO, they decided to back off from the bidding contest instead of upping their bid. Otherwise, they could end up without enough money to use in delivering the synergies and in carrying out the cost savings projected. CEO Mattingley strongly believes that his company will manage and prosper by entering into practical and strategic acquisitions.