Party Gaming and bwin announced on Tuesday that their proposed merger is expected to be completed on Thursday, March 31 after the Vienna Commercial Court formally entered the merger into the companies’ register this week. The merger, which would create the world’s largest gambling company under the name bwin.party Digital Entertainment plc, is still subject to court approval in Gibraltar.
Austrian-based bwin said its shares would cease trading on the Vienna Stock Exchange on March 25. On April 1, existing bwin shareholders will get 12.23 bwin.party depositary interests for each bwin share. Party Gaming stated that these depository interests can then be traded on the London Stock Exchange under the ticker symbol “BPTY.” The new shares will give bwin’s shareholders approximately 52% of the enlarged group.
The exchange ratio of 12.23 bwin.party depositary interests for each bwin share will result in so-called “fractional entitlements,” rights to fractions of bwin.party depositary interests that cannot be traded on the London Stock Exchange. In accordance with the terms of the merger, these entitlements will be disposed of and the proceeds of sale credited to the former bwin shareholders in a process that may take up to two weeks.
Party Gaming and bwin first announced their intentions to merge back in July. The companies issued a 478-page document to shareholders in December giving a detailed outline of the planned merger. Shareholders voted on the merger at an extraordinary general meeting (EGM) in January, where bwin shareholders unanimously approved of all five resolutions relating to the merger. A total of 335 shareholders attended bwin’s EGM, representing 18.1 million shares.
The new group will be jointly run by the current Chief Executives of the two companies, Jim Ryan (Party Gaming) and Norbert Teufelberger (bwin). Party Gaming will keep its main headquarters in Gibraltar, while bwin will continue to operate from Austria.
Bwin has yet to publish its 2010 financial results, but Party Gaming reported a 15% increase in revenue over 2009′s numbers. Despite seeing a 9% decline in poker revenue, the company earned €357.3 million ($498 million) in 2010, compared to €310.1 million ($432 million) the previous year. With the merger, Party Gaming hopes to even the playing field in the online poker arena as it positions itself to re-enter the U.S. market. PartyPoker currently sits in third place in the PokerScout.com online traffic rankings behind the industry leaders PokerStars and Full Tilt Poker.
Said Party Gaming CEO Ryan, “As our merger with bwin is set to complete on March 31, 2011, we are finalizing our plans to integrate both businesses as quickly as possible and remain confident about delivering the cost and revenue synergies we have already identified in line with the previously announced timetable, with the full €55 million per annum being delivered by 2013. We plan to provide a further update on our progress at the time of the half year results in August 2011.”
bwin.party Digital Entertainment plc will focus on business-to-consumer products, an area in which both companies currently enjoy considerable strength. However, because of the financial gains added through the merger, the company will also encroach into business-to-business and business-to-government endeavors. Teufelberger explained, “Our many years of online know-how, healthy balance sheet, and one of the largest pools of poker liquidity in any regulated market will make us an attractive business partner.”
