888’s offer of 104.09 pence per share, made up of 39.45p in cash and 0.404 new 888 shares, is 16.4 percent higher than Bwin.party’s share price of 89.40p before talks began on May 14. The company’s market cap is £849.08 million.
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Norbert Teufelberger, bwin.party’s CEO, will provide consultancy services to the new company once a deal has been agreed. Party for GBP906.5 million last week in a bid backed by Canadian gaming company Amaya Gaming Inc, but two people close to the matter said 888 now looks set to pip GVC to the post, the FT said.
Bwin.party was little changed at 103 pence at 10:20 a.m.in London, while 888 jumped 7.3 percent to 171.75 pence.
Shares (Frankfurt: DI6.F – news) in 888 were up 6.8 percent by 0845 GMT. “There would appear to be room for GVC to come back, but 888 now looks firm favorite”.
The companies also plan to consider making Bwin.party’s business-to-business technology unit into a standalone entity, which could be spun off as a separately listed company with shares being distributed to investors, 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”, 888’s executive chair Brian Mattingley said in the statement, adding that the enlarged group would “benefit from significantly enhanced scale, an improved product offering as well as significant cost and revenue synergies”. Analysts at Panmure Gordon reiterated a hold rating and set a GBX 105 ($1.63) price target on shares of Bwin.party Digital Entertainment Plc in a research note on Thursday, July 9th.
The acquisition of bwin.party is expected to be earnings enhancing for 888, excluding one-off costs, in the first full financial year of ownership.
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Bwin. Party chief executive Philip Yea said: “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”.
