Tenacity Pays Off as Bwin Accepts GVC’s $1.6 Billion Acquisition Bid

Bwin’s Board finally convened last Thursday in order to arrive at a final decision on whom to select as preferred buyer; whether to continue with its original decision of recommending 888 Holdings or to reverse the decision by naming GVC as preferred bidder. As the turn of events has it, GVC’s resolve to takeover Bwin paid off, as the Bwin Board concluded the meeting with a new announcement.

Bwin Board Chairman Philip Yea announced that they have put an end to an 8-month-long bidding battle between the two online gaming giants.  Mr. Yea conveyed through a conference call that they have decided on GVC as the buyer to recommend to Bwin shareholders.

According to reports, GVC won the Bwin Board’s approval by increasing its bid to $1.6 billion, a development that 888 Holdings described as an undisclosed enhanced offer submitted to the Bwin Board. As a result, 888Holdings conveyed through a separate statement that after exercising due diligence, the company will no longer participate in the Bwin bidding competition. According to the statement, 888Holdings no longer sees sufficient value that would warrant a modification of its original offer.

Mr. Yea describes the exercise as a long and drawn out but necessary process, as it called for balancing a number of very fine points at the fringe. The Bwin Chairman went on to explain that the process included polling Bwin shareholders during the week. However, Mr. Yea disclosed that opinions regarding the two offers were split evenly.

Nonetheless, a considerable group of shareholders expressed willingness to give their support to a board decision that gives preference to GVC. On that note, the Board Members acknowledged that they could not please all of Bwin’s shareholders, although they hope to eventually gain the support of those who do not agree with the Board’s decision, as a show of leadership.

The Bwin Chairman explained further that their decision to select GVC as the ultimate buyer is not mainly because of the higher bid price offered. According to Mr. Yea, they also took into consideration GVC’s strong history of integrating acquisitions, the foremost being the Sportingbet takeover deal in 2013. Moreover, GVC’s annual cost saving projections for a Bwin-GVC merger is for $140 million, which is much higher than 888’s $78 million cost savings projection.

Reports have it that one of the conditions put forward by 888 as part of the deal was for the migration of Bwin customers to the 888 platform. Accordingly, the Bwin Group was not too keen on agreeing to the proposed migration, as it meant going through another round of integration and migration processes. Apparently, the people at Bwin prefer not to go through the same situations they went through during the 2011 Bwin-Party Gaming merger.

Still Chairman Yea gave warning that the engagement party will not be all roses and chocolates, as some staff trimming is bound to take place once the new company is formed.