Consolidation in the gaming industry took a step forward on Monday as bidders revealed their hands in a takeover battle for online betting site Bwin.party (LON:BPTY).
888 Holdings (LON:888), which was itself the subject of a failed £700mln takeover bid by bookmaker William Hill (LON:WMH) in February, confirmed market talk that it had made a takeover proposal to Bwin.
It came after Sportingbet operator GVC Holdings (LON:GVC) on Friday unveiled a bid for Bwin, sending the latter’s shares up more than 10p to just shy of 100p.
888, which is being advised by Investec, said it believed there was “significant industrial logic” in a merger between itself and Bwin, which would benefit both companies and their shareholders.
Bwin said in November that it was in talks with a number of interested parties about “a variety of potential business combinations”.
On Friday, it confirmed that those discussions were continuing and that it had received the proposal from GVC. It added that it would update the market in due course.
The news follows a rise in merger and acquisition activity in the gaming sector, with private equity firm CVC buying a controlling stake in Skybet last December in a deal valuing the latter at £800mln.
Canada’s Amaya Gaming bought Pokerstars and Full Tilt for $4.9bn in a deal last June.
888’s founder Avi Shaked rejected Hill’s bid for the group in February, saying the proposal – worth 200p a share plus a 3p per share dividend – was short of the 300p he wanted.
Jamie Constable at N+1 Singer said in a note earlier this year that the industry was starting to reorganise itself in the face of new regulations and taxes.
He pointed out that Ladbrokes (LON:LAD) had often been named as a potential bid target and Playtech (LON:PTEC) had boosted its coffers as it sought deals, and Betfair (LON:BET) had bought the HRTV horseracing network for US$25mln plus up to US$47.8mln in the next seven years.
Constable added: “Also don’t forget Netplay who have the potential to be aggressor with their strong balance sheet but also could be a nice morsel for another party looking to boost their online market share.”