Bwin switches horses in GVC and 888 battle

Sources claim bwin.party was ready to promote GVC to preferred bidder status only for 888 to submit revised offer

Bwin.party was preparing to tell the market it had decided to promote GVC Holdings to preferred bidder status before a revised 888 offer forced the firm into a late rethink, eGR North America understands. [private]

Sources close to the negotiations claim bwin.party had informed GVC Holdings over the weekend 888 had been stood down and had begun working on documentation to announce GVC as its preferred bidder.

But a revised proposal tabled by 888 in the early hours of Monday morning, believed to be for 115p per share and still lower than the current 131p valuation of GVC’s offer, had forced talks to continue leaving 888 officially in the driving seat to clinch the deal.

And if 888 remains the preferred bidder despite submitting a lower offer, GVC would consider a hostile takeover of the operator, according to reports in UK newspaper The Times.

Asked whether GVC would consider a hostile takeover of bwin.party, GVC chairman Lee Feldman said they had “certainly thought about it”.

But speaking to eGR North America this morning a GVC spokesman tried to distance the operator from such a move and instead said it was confident its offer would be the winning bid.

“While the potential of addressing bwin.party shareholders direct is a viable option, it is further down the agenda than winning through the current auction process,” the spokesman said.

“GVC firmly believes its current cash and shares offer, which represents a more than ten percent premium to 888’s bid, will win both bwin.party shareholder and board support as it represents the best long term value prospect for investors.”

Bwin.party said in a statement yesterday it was evaluating 888’s revised proposal alongside the one it received from GVC back in August, and intended to consult with its shareholders “in the coming days” before making a final decision.

In the meantime it said the bwin.party board’s unanimous recommendation of the 888 bid remained unchanged.

And while bwin.party has set no firm date for when it will update the market next, eGR NA understands an announcement will be made within a week, with this Friday thought to be earmarked as a possible date.

“The board is continuing to consult with shareholders on the latest proposals from both 888 and GVC, both of which have attractive but differing features,” a bwin.party spokesman told eGR NA.

“This is a process that is ongoing but is expected to be completed over the coming days. The significant equity component of both offers requires that the board considers a broad range of factors that may impact the long-term value of each proposal for shareholders.”