888 Announces Intention to Buy bwin.party
We’ve been tracking the financial difficulties of bwin.party for a few months now. Although the operator has been able to maintain the usual service across all its brands (the most popular of which is no doubt PartyPoker), everyone in the industry has been aware for a while that a sale of the company was imminent. Now we have a pretty good idea who that buyer might be.
In the last couple of months, a load of names have been floating around as possible buyers for the ailing, but potentially profitable, company. The first name to surface – which honestly surprised no one, given the spending spree it’s been on for the last year – was Amaya. Another front runner was thought to be William Hill, given its recent interest in acquiring other online gambling products.
Alas, it seems that all the speculation over the past months has been inaccurate, with neither of these big players announcing any intention of bidding for bwin.party. We shouldn’t be surprised by this though; in takeovers and mergers there’s always talk of possible interested parties which comes to nothing. It’s only when players step out and announce their intentions that we really start getting a picture of what’s going on.
This doesn’t mean they’re out of the game entirely though, and there are still rumours that the like of Amaya or Playtech may still be in the market for bwin.party.
Is 888 Holdings a Possible Buyer?
This week, 888 Holdings announced that it had the backing of its shareholders to pursue a takeover of bwin.party. In a statement released by 888, it outlined how its “board believes that there is significant industrial logic in a combination of 888 and bwin.party, benefiting both companies and all shareholders” – i.e. everyone’s a winner if 888 Holdings were to carry through with the takeover.
The two would be a great fit, given that they both have extremely strong poker offerings, and could definitely benefit from each other’s experience and expertise.
Takeovers are a very common part of any industry and online and mobile poker and gambling is no different, but what makes this merger interesting is the size of the two companies involved and the implications a merger of such a size would have throughout the industry. There’s also another interesting thing at work…
Is 888 Holdings an Unlikely Candidate?
There’s a couple of oddities in this case which make you think that 888 Holdings seems like a bit of an odd choice to be buying bwin. Firstly, it’s worth noting that it really wasn’t very long ago that we were talking about 888 Holdings itself being bought out – in its case by William Hill. It’s important to remember though, that the suggested merger was theorised on the back of William Hill wanting to benefit from 888’s online and mobile poker expertise, rather than 888 needing the cash necessarily.
Another weird thing worth noting, is that at £600,000,000, 888 Holdings is in effect worth less than bwin’s £800,000,000 value. This would, in effect, be a reverse takeover as the entity worth less would be taking the reins of the entity worth more. But would this really be so odd? If 888 can get bwin.party out of the choppy waters it’s been treading for a year, does it really matter who’s steering?