Online gambling firm 888 clinches deal to buy Bwin.party for $1.4 billion

Reuters News
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Posted: Jul 17, 2015 1:48 AM

(Reuters) - Online casino and poker firm 888 said on Friday it had agreed to buy larger rival Bwin.party Digital Entertainment in a cash and stock deal worth almost 900 million pounds ($1.4 billion).

888, which rejected a takeover by Britain's biggest bookmaker William Hill in February, had been battling against a 908 million pound offer from GVC Holdings for Bwin, which put itself up for sale last year.

The deal is the latest in a flurry of M&A activity in the industry, which is expected to accelerate as gambling firms look to protect themselves from increasing tax and regulation pressures and raise investment in marketing and technology.

888 currently has a market capitalization of 572 million pounds versus 848 million for Bwin, which has struggled with the decline of regulated poker markets in Europe and to realize cost savings since its creation via a merger of sports betting group bwin and online poker group PartyGaming in 2011.

888's offer of 104.09 pence per share is 16.4 percent higher than Bwin's share price of 89.40p before talks began on May 14.

The offer consists of 39.45p in cash and 0.404 new 888 shares for each Bwin share. Upon completion Bwin shareholders will own 48.9 percent of the enlarged group.

In May, when announcing its bid for Bwin, 888 had said shareholders representing 59 percent of its share capital had irrevocably committed to vote in favor of the deal.

The two companies said the enlarged group would benefit from enhanced scale and product offerings, as well as significant cost and revenue synergies. They said cost synergies will amount to not less than $70 million per annum by 2018.

(Reporting by Neil Maidment in London and Mamidipudi Soumithri in Bengaluru; Editing by Anupama Dwivedi)