Sportingbet Parent Company GVC, Confirms Proffering Takeover Bid for Bwin.Party

GVC Holdings Plc, parent company to UK sportsbook operator Sportingbet PLC came out with an announcement last Friday (May 15, 2015), confirming previous reports that the company has proffered a takeover bid to rival betting company Bwin.Party Digital Entertainment. GVC, has accordingly, revised the propositions extended to Bwin.Party since acquisition talks began in November of 2014.

Although GVC CEO Kenneth Alexander remarked sometime in March that a company such as Bwin would interest his firm, the announcement made last Friday is the first official confirmation of the sportsbetting company’s active involvement in Bwin.Party’s acquisition negotiations. The announcement also disclosed that their proposition is for a reverse takeover, considering that Bwin.Party is more than triple the size of GVC Holdings.

Based on last Friday morning’s data at the London Stock Exchange, Bwin.Party has £805 million in market capitalisation, while GVC has roughly around £280 million, also in market capitalisation. After GVC came out with the announcement, Bwin.Party confirmed the ongoing discussions of its sale not only with GVC, but with other interested parties as well. By 10.22 AM – ET last Friday, Bwin.Party shares went up by 9.6 percent at a share price of 98.00 pence.

GVC Holdings, albeit smaller than Bwin.Party Digital, is confident that they can duplicate its Sportingbet feat. GVC Holdings, in partnership with UK William Hills, took over Sportingbet’s operations in 2013 for a reported sum of £530 million.

In GVC’s latest financial report, it showed that more than half of revenue realised during the year came from Sportingbet’s operations in more than 26 countries. Sportingbet, as the company claims, is the largest provider of online sportsbetting products in several countries. Bwin.Party on the other hand, presented 2014 financial statements that showed the firm’s third straight decline in core revenue, despite undertakings to accelerate growth by implementing significant cost cutting measures, and strengthening the composition of the company’s board during the year.

However, both sports betting firms have made it clear that the announcement confirming the GVC negotiation to acquire Bwin.Party does not come with a guarantee that discussions will lead to the selection of GVC as “buyer”; but is provided only as part of its commitment to furnish updates about the ongoing acquisition negotiations.

Last March 2015, when talks about the Bwin.Party sale became ripe with speculations, Philip Yea, Bwin.Party’s non-executive Chairman had commented in the Financial Times that they are into “further discussions” with several potential buyers, but did not disclose any particular company. The announcement last Friday though made mention of GVC as one of the interested buyers and that the latter has submitted a revised proposal. Mr. Yea, who has been chairing the Bwin.Party Boards since last year, had stated that they are testing buyers against each other and against the business. He added that such processes take whatever time it needs.

Indeed, nothing is still definite, as the May 16 issue of the Sunday Times carried an article, reporting 888Holdings as the latest buyer to tender an acquisition offer. Speculations have again surfaced, with analysts already predicting 888Holdings as having a greater edge over GVC because of 888Holding’s more than £600 million stock market capitalisation.