Amidst market speculations, bwin.party, a major online poker and gambling operator based out of Gibraltar, issued a statement yesterday confirming its exploration into a possible sale. Rumors first began circulating that bwin.party was entertaining a £1.19 billion (145p per share) takeover bid from Canadian-based Amaya Gaming, the parent company of PokerStars, Full Tilt and the Ongame Network. While the popular online gaming company corroborated the rumors of a possible acquisition, no suitors were named in the statement.
“Further to recent media speculation regarding a possible bid for bwin.party,” read the official announcement on bwinparty.com on November 12th, “the Board of bwin.party confirms that it has entered into preliminary discussions with a number of interested parties regarding a variety of potential business combinations with a view to creating additional value for bwin.party shareholders.”
The statement went on to say, “Such discussions may or may not result in an offer being made for the Company. However, as all such discussions remain at a preliminary stage, there can be no certainty as to whether or not they will result in any form of transaction with any party.” In conclusion, the prominent online poker, casino and sportsbook provider said, “Further announcements will be made as and when appropriate.”
Bwin.party was once listed as the largest publically traded online gambling company in the world, but that position was lost several years ago. By 2012, bwin.party had dropped to the second position on the list, falling even further to the sixth spot over the next 24 months. According to the company’s 2014 Q3 reports, its online poker division is responsible for much of that.
While the brand’s sports betting offerings rose 11% from the same period in 2013, poker, casino, and bingo products all suffered a loss. Online poker revenue saw the greatest decline, having fallen 25% in the last 12 months. Even so, the report showed an overall increase of 2% in revenue, which substantiates the company’s claims that entertaining offers does not necessarily mean an acquisition is in bwin.party’s future.
The company has thus far declined to comment on its suitors, but media sources have pointed towards both Amaya Gaming and Playtech taking a keen interest in a takeover. Stock analysts at Financial Times Alphaville wrote that they believed Amaya had proposed a 145p per share buyout of bwin.party, which would amount to approximately £1.19 billion. The London Evening Standard, on the other hand, pointed the finger at Playtech, primarily based on recent statements that he brand was setting aside €315 million for acquisitional purposes – what they called “organic opportunities”.
Prior to yesterday’s announcement, officials from bwin.party refused to offer any insight into the rumors of a potential buyout, but when the stock market reflected those rumors, the company’s hand was forced. When the story first leaked, bwin.party’s stocks jumped from just above 100p to 121.3p overnight; a staggering 12.52% increase.
A takeover by Amaya Gaming would make sense. The company has been on a buying frenzy lately, including the previous acquisition of Ongame Network from bwin.party, and the procurement of the Rational Group, parent company of PokerStars and Full Tilt, earlier this year. Playtech is the world’s largest online gaming software provider, and may be looking for a way to recoup expected losses after the Malaysian government recently blocked 170 online gambling sites.