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UK – GVC advised to increase Bwin.Party offer by 14 per cent

By - 30 July 2015

bwin.party has advised GVC to increase its takeover offer if it wants to out-bid 888 Holdings and seize control of the company.

GVC and 888 remain locked in battle for the takeover of Bwin.Party as the process of consolidation continues apace in the gambling sector.

Bwin.Party had welcomed a US$1.4B offer from 888, which was then topped by GVC Holdings who bid US$1.6bn.

Jason Ader, who owns 5.2 per cent bwin.party said GVC should increase its offer by a further 14 per cent.

“There are a lot of risks and uncertainties with this GVC bid,” he said. “ GVC has done just enough to have a conversation with bwin.”

Whichever offer is ultimately accepted, the new entity will become a top three player in the interactive gambling market, according to analysis by Global Betting and Gaming Consultants (GBGC).
Based on gross gaming yield (the amount lost by gambling customers), Bwin.Party currently sits in fourth place, with 888 in 8th and GVC in 12th position.

But an 888-Bwin business would leap into second place, ahead of PokerStars, whilst a GVC-Bwin tie-up would jump ahead of William Hill into third place.

Neither deal would threaten Bet365 in the number one position.

The battle for Bwin is just one of several deals to have taken place in the gambling sectors in recent years as operators try to gain size and see off their rivals in increasingly competitive, high-tax markets.

Another major deal going through is Ladbrokes’ takeover of Coral. Ladbrokes’ digital division has really lost ground in recent years and just makes the top 10 operators at number 9. A Ladbrokes-Coral entity would have combined interactive GGY of around GB£ 520 million, still some way behind William Hill’s 2014 performance.

Global Betting and Gaming Consultants’ CEO Warwick Bartlett commented: “The UK’s Point of Consumption Tax and the regulatory wind of change blowing through Europe are causing the industry to consolidate. Companies are hoping that they will be able to take out a swathe of operating costs by merging. As we have seen in the past, however, integration is not without problems and in the meantime Bet365 marches on. Even after a potential merger between 888 and Bwin, Bet 365 will still be two-thirds larger by GGY than the new entity.”

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