After months of offers and counter-offers, the board of directors of bwin.party have said that they intend to recommend GVC’s acquisition proposal to their shareholders over the offer from 888.
GVC’s latest bid for bwin.party values the online gaming operator at 129.64 pence per share or £1.116 bn, with bwin.party shareholders receiving 25 pence per share in cash and 0.231 new GVC shares.
In an announcement early Friday, GVC said that bwin.party’s board has unanimously decided to recommend the offer, which will be effected by way of a Scheme of Arrangement under Gibraltar company law.
The offer price represents a 12.5 per cent premium on yesterday’s closing price of bwin.party shares and a 54.6 per cent premium on the volume weighted average closing price on bwin.party in the three months prior to the start of acquisition talks in May.
GVC also said that its offer was 12.9 per cent higher than implied value of 888's revised proposal for bwin.party.
The combination of bwin.party and GVC is expected to result in cost savings of at least €125m per annum for the enlarged group by the end of 2017.
Subject to the approval of bwin.party and GVC shareholders and other approvals and closing conditions, the transaction is expected to complete by the end of Q4 2015 or early 2016.
Norbert Teufelberger, current chief executive of bwin.party, will serve on the board of the enlarged group as a non-executive director.
Commenting on the offer, bwin.party chairman Philip Yea said: "In recommending the offer from GVC, the board has taken into account many factors including, but not limited to, the headline value per share and the consideration being offered, the level, timing and deliverability of the financial synergies to be generated and the enlarged group's growth strategy in an increasingly competitive marketplace.
“As a result of these and other factors, including the proven track record of GVC's management team in creating substantial value for shareholders, after a carefully managed and diligent review process, the board has withdrawn its recommendation for the 888 offer and is now advising bwin.party shareholders to vote in favour of the offer from GVC."
GVC chief executive Kenny Alexander said: "GVC is the natural partner for bwin.party considering our strong sports betting and online gaming pedigree.
“Sports betting is in our DNA and leveraging GVC's experience of successfully acquiring and restructuring online gaming businesses, notably Sportingbet in 2013, we look forward to merging the two operations to deliver long term value for combined shareholders. GVC has been working closely with bwin.party's management and has identified many talented individuals with whom it looks forward to working to ensure the future success of the enlarged business."