Agrees To Buy Bwin.party In GBP 898.3 Mln Deal

That values Bwin.party at 104.09p per share, a premium of 16.4 per cent to the closing price on 14 May, the original day the offer was made.

888 was itself targeted by an acquisition bid from Britain’s biggest bookmaker William Hill plc, which it rejected.

The recommended deal is the latest in a flurry of M&A activity in the industry, a trend set to continue as firms expand to help offset increasing taxes and tighter regulation and fund higher marketing and technology spend.

Goodbody Stockbrokers Ltd reissued their hold rating on shares of Bwin.party Digital Entertainment Plc (LON:BPTY) in a research note released on Friday morning, ARN reports.

The boards of directors of online gaming entertainment and solutions provider 888 Holdings Plc.

Shares (Frankfurt: DI6.F – news) in 888 were up 6.8 percent by 0845 GMT. “The combined group is likely to be highly cash-generative, potentially allowing for future shareholder returns”.

Bwin 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.

The offer consists of 39.45p in cash and 0.404 new 888 shares for each Bwin share. The offer will be financed through a new $600 million loan credit facility and results in bwin.party shareholders owning approximately 48.9% of the new, enlarged company.

“This is a transformational opportunity for 888 in the consolidating online gaming industry, which is expected to grow significantly over the coming years”. Both companies said that the deal would enhance their products, and predicted that synergies would not be more than $70 million a year by 2018. Combined revenue previous year would have been about $1.1 billion, 888 said in a statement.

“Bringing our two groups together will generate substantial financial synergies for the benefit of both sets of shareholders and create a strong player with the breadth of product, brands and geographic coverage to grow faster than either business would be able to achieve stand-alone”, bwin.party Chairman Philip Yea added.