GVC Holdings, one of the two suitors for online gaming company bwin.party, confirmed Friday that it in talks with bwin.party to try to convince its board to move forward with a proposal which would have GVC acquire the parent company of partypoker.
In a press release issued Friday, GVC stated:
GVC is working closely with bwin.party and its advisers with a view to progressing the remaining open aspects of its Proposal to enable the bwin.party Board to make a full evaluation of the Proposal. GVC anticipates that this work should conclude within the next 5-10 business days.
This sort of dry mergers and acquisitions news is typically quite boring, but all things considered, the recent GVC-888-bwin.party love triangle (or I guess love “V” as there are no amorous feelings between GVC and 888 Holdings) has been fairly interesting. It began a month ago, on July 9th, when GVC Holdings teamed up with PokerStars and Full Tilt poker parent company, Amaya Gaming, to make a 110p per share purchase proposal for bwin.party.
About a week later, 888 Holdings offered less – 104.09 pence per share – but bwin.party’s Board of Directors actually recommended it to shareholders because the other, non-monetary factors were more attractive. GVC and Amaya were likely going to split up the company, GVC grabbing the sportsbook and casino gaming business and Amaya taking control of partypoker, something that bwin.party’s execs just didn’t seem to like. Plus, there would be a risk of pissing off other companies in the industry, as Amaya would then have not only party, but PokerStars and Full Tilt Poker, as well. That may not have been an issue, but it certainly wasn’t something to mark in the “Pro” column. 888 also leaned on a number of things its business has in common with bwin.party, such as nearby offices and overlapping licensing, which would make the transition much easier.
GVC Holdings wasn’t done, though. In the final week of July, it sweetened its own, already higher proposal, increasing its bid to 122.5p per share, making it a potential deal worth just over a £1 billion ($1.57 billion). This time, GVC eliminated Amaya Gaming from the proposal in order to remove some of the concerns over Amaya’s role and the possible break-up of bwin.party. To be able to afford the purchase (bwin.party is much bigger than GVC Holdings), GVC secured a €400 million loan from Cerberus Capital Management. It appears that the funds procurement wasn’t a last-ditch effort, either, as Kenny Alexander, CEO of GVC Holdings, told The Financial Times, “We have been talking with Cerberus for quite some time. They have been involved for months.”
It looked like GVC had more than one possible approach to the acquisition, so it went with Plan B once bwin.party decided Plan A wouldn’t work. In opting for 888, bwin.party surprised GVC. Said Alexander, “I was very surprised when they made that decision. 888 were there and we were not quite there, but we were progressing well. We would have got there but they took the decision they took.”