The race to sign bwin.party digital entertainment plc is over after news broke that the bid of £898 million from 888 Holdings has been accepted by the bwin.party board of directors.
888’s accepted offer is a cash plus shares deal that sees 39.45 pence in cash and 0.404 new 888 shares exchanged per current bwin.party share. The offer will be financed through a new $600 million loan credit facility and results in bwin.party shareholders owning approximately 48.9% of the new, enlarged company.
The deal is expected to be completed by the start of 2016 and at least $70 million in cost saving measures implemented by the end of the 2018 financial year.
In a statement to the London Stock Exchange, Brian Mattingley, the Executive Chairman of 888, said:
This is a transformational opportunity for 888 in the consolidating online gaming industry, which is expected to grow significantly over the coming years. The Enlarged Group will benefit from significantly enhanced scale, an improved product offering as well as significant cost and revenue synergies. It delivers a substantial premium to bwin.party Shareholders whilst also giving them the opportunity to participate in this value creation opportunity. 888's management have a well-established track record of delivering outperformance since 2011 and we look forward to working with our new colleagues to create a global leader.
Current Chairman of bwin.party, Philip Yea, commented:
A year ago we set out to explore industry consolidation opportunities whilst working to improve our core business. We have made substantial progress on both counts and our announcement today marks the first step in a new phase in our short history. Bringing our two groups together will generate substantial financial synergies for the benefit of both sets of shareholders and create a strong player with the breadth of product, brands and geographic coverage to grow faster than either business would be able to achieve stand-alone. Drawing upon a wealth of experience accumulated over the past few years, our management team looks forward to working with new colleagues to realise the considerable potential that this business combination presents.
Upon completion of the deal, Liz Catchpole and Martin Weigold will join the 888 Board. Catchpole is a bwin.party independent non-executive director and Chair of the bwin.party Audit & Risk Committee while Weigold is bwin.party’s Chief Financial Officer. They will become an independent non-executive director and a non-executive director, respectively.
Norbert Teufelberger, bwin.party’s CEO, will provide consultancy services to the new company once a deal has been agreed.
At 9:45am on Friday 17 July, shares in bwin.party had fallen 0.58% while shares in 888 rose by 4.53%. Shares in GVC Holdings, the company whose bid for bwin.party was unsuccessful, had risen by 1.13%.