888 in driving seat to acquire bwin.party
Analysts suggest 888 is the frontrunner to acquire bwin.party, which is poised to update the market as early as this week
888 Holdings appears to be in the driving seat to acquire bwin.party with the operator’s share price rising from 150p to 160p since Friday after strong analyst backing and an update on deal progress now expected as soon as this week.
Canaccord Genuity issued a buy recommendation on 888 shares in note on Friday and said the fit for an 888 takeover of bwin.party was “strong” adding the combined 888/bwin.party business could achieve around $60m in cost savings and generate EBIDTA of $250m in its first full year.
And while 888 chief operating officer Itai Frieberger would not comment on whether his firm was now the frontrunner to acquire bwin.party, he did say its bid had received some “positive reviews” recently, with analysts at Numis and Investec also reiterating a “buy” rating.
The share price hike comes amid media reports that bwin.party is poised to update the markets on the offers tabled to acquire the operator by 888 and GVC/Amaya as early as this week.
“Bwin.party would definitely much rather do the 888 deal but I suspect shareholders, depending on price, would rather the cash from Amaya/GVC,” an industry analyst told eGaming Review.
Another analyst added: “I think it is a close run thing but perhaps 888 might be slight favourites on the basis I think their paper (i.e. shares) would be slightly more attractive to bwin.party shareholders than GVC.
“This is due to the current scale and profile of the respective businesses – not a reflection of management – both have impressive track records.”
888 made a part-cash, part-paper deal for bwin.party that received the backing of the majority of its shareholders, including the Shaked family who scuppered an earlier £750m takeover bid by William Hill.
But while momentum appears to be building behind 888’s offer, Canaccord said if bwin.party goes to another bidder 888 would “stand out as the next obvious consolidation target”.
888’s rival bidder GVC was the first firm to confirm it had tabled an offer to acquire bwin.party in its entirety back in May, and later confirmed that its bid would be part-funded by Toronto-based Amaya Gaming.
Bwin.party’s share price was down 0.70% at the time of writing to 99.50p, GVC was down 0.33% to 458.90, while Amaya’s share price closed on to Toronto Stock Exchange yesterday up 1.3% at CA$34.27.