GVC Holdings has made a substantially improved second offer to acquire bwin.party digital entertainment, which will be financed through a £150m equity placing of new GVC shares and a €400m senior secure loan provided by affiliates of US private equity firm Cerberus Capital Management.
GVC confirmed Monday that the company has made a proposal to the bwin.party board for the acquisition of the entire issued and to be issued share capital of bwin.party, under which shareholders would be entitled to receive 122.5p for each bwin.party share. This would value bwin.party at around £1.0bn.
The offer consists of up to 25p in cash, subject to confirmation that bwin.party’s cash position is as GVC expects based on information received to date, with the balance of the value in new GVC ordinary shares.
GVC will finance the proposal via a combination of the issuance of new GVC shares to bwin.party shareholders, and a €400m senior secured loan provided by affiliates of Cerberus Capital Management.
In addition, the company intends to raise approximately £150m through an equity placing of new GVC shares for cash in order to fund restructuring costs, the refinancing of existing bwin.party debt and for additional working capital purposes.
GVC said that it has delivered the relevant documentation, in substantially final form, to the bwin.party board. It remains unclear at this time whether Amaya is involved in the bid.
“If a transaction were to be completed, the GVC board believes that cost reductions exceeding €135m per annum would be achieved across the enlarged group by the end of 2017,” said GVC.
bwin.party acknowledged the proposal, but stressed that there was no guarantee it would lead to GVC making an offer for the business.
Shares in GVC Holdings plc (Co. Data) (AIM:GVC) dropped 1.28 per cent to 423.00 pence per share in London this morning following the announcement, while shares in bwin.party digital entertainment plc (Co. Data) (LSE:BPTY) were trading up 1.84 per cent at 110.60 pence.