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 (€1.29 billion).
888, which rejected a takeover by Britain's biggest bookmaker William Hill in February, had been battling against a £908 million offer from GVC Holdings for Bwin, which put itself up for sale last year.
The deal is the latest in a flurry of mergers and acquisitions 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 capitalisation of £572 million versus £848 million for Bwin, which has struggled with the decline of regulated poker markets in Europe and to realise 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 per cent higher than Bwin’s share price of 89.40 pence before talks began on May 14th. The offer consists of 39.45 pence in cash and 0.404 new 888 shares for each Bwin share. Upon completion Bwin shareholders will own 48.9 per cent of the enlarged group.
In May, when announcing its bid for Bwin, 888 had said shareholders representing 59 per cent of its share capital had irrevocably committed to vote in favour 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 (€64.2 million) per annum by 2018.
Reuters
