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We witness a very interesting development on the M&A front in the online gaming sector today, as bwin.party Digital Entertainment Plc (LON:BPTY), owner of British CFD and spread betting broker InterTrader, received and recommended a $1.7 billion acquisition bid from GVC Holdings PLC (LON:GVC).
The news comes just a couple of days as the official bidding war for bwin started, with previous favorite to buy the company – 888 Holdings Public Limited Company (LON:888), revised its bid. Up until today, bwin.party was recommending an offer by 888, which entitled bwin’s shareholders to 39.45 pence in cash and 0.404 New 888 Shares per each bwin.party’s share.
The offer by GVC, however, seems to be more than lucrative. Under its terms,
- for each bwin.party Share: 25 pence in cash and 0.231 New GVC Shares
- The Offer represents a value of approximately 129.64 pence per bwin.party Share based on the closing price per GVC Share at the close of business on 3 September 2015 (being the latest practicable date prior to publication of this announcement).
- The Offer values the entire issued and to be issued ordinary share capital of bwin.party on a fully diluted basis at approximately £1.116 billion ($1.7 billion).
Commenting on the Offer, Philip Yea, Chairman of bwin.party, said:
“In recommending the Offer from GVC, the Board has taken into account many factors including, but not limited to, the headline value per share and the consideration being offered, the level, timing and deliverability of the financial synergies to be generated and the enlarged Group’s growth strategy in an increasingly competitive marketplace.
“As a result of these and other factors, including the proven track record of GVC’s management team in creating substantial value for shareholders, after a carefully managed and diligent review process, the Board has withdrawn its recommendation for the 888 offer and is now advising bwin.party shareholders to vote in favour of the Offer from GVC.”
The cash part of the deal will be funded by up to €400.0 million (approximately £291.3 million) of senior secured debt provided by Cerberus. In addition GVC proposes to raise approximately £150.0 million (approximately €206.0 million) by way of a placing of New GVC Shares to institutional investors, and a subscription of New GVC Shares by certain investors, under the Fundraising. Certain GVC Directors will also participate in the Fundraising.
Following completion, bwin.party Shareholders will own approximately 66.6% of the Enlarged Group and will be able to participate in the future growth prospects of the Enlarged Group.
The deal requires approvals by bwin.party and GVC shareholders, as well as by respective regulators.
To view the official regulatory filing with the LSE, click here.