The Battle for Online gambler 888 could up the stakes with raised offer

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The £1 billion bid battle for gambling firm has intensified as the boss of suitor 888 hinted he could raise his offer for the business to ward off Sportingbet owner GVC.

Struggling unanimously recommended 888’s cash and shares offer last month, valuing bwin at 105.3p or £868 million on today’s share price.

But GVC is close to tabling a much higher, 125.8p a share £1.04 billion proposal after satisfying the board on “key aspects” and bwin’s share price is trading 10p above 888’s offer at 114.5p.

Executive chairman Brian Mattingley said it was “not a foregone conclusion” that would go with GVC and insisted that his offer had “greater intrinsic value”. 

But he added: “If the board decide to switch then and only then will we consider our options. I’m not prepared to comment at this stage, apart from to say that I’m not going to have an easy Bank Holiday weekend.” 

Bwin has said it will update the market on the takeover talks on Tuesday.

Mattingley said he had not considered other potential deals if 888 missed out because “at this moment in time we’re very confident that we’ll get this transaction over the line”, although he claimed “there will be tactical acquisitions and other opportunities to develop our business” if bwin falls to GVC. 

888 itself was a target of William Hill earlier this year, but its Israeli founders and majority shareholders rebuffed the offer as a takeover frenzy grips the gambling sector.

“We’re very confident that we’ll get this transaction over the line.”

888 boss Brian Mattingley

Paddy Power and Betfair announced merger plans this year while Ladbrokes and Coral are also currently in the process of combining.

GVC chief executive Kenny Alexander said: “We are determined that GVC will play an important role in the continuing consolidation of the online gaming sector. We believe the combination of the bwin brand and our sports offering would deliver a highly profitable and world leading sportsbook.”

The-market also digested interim results from both bidders as well as today, although the company figures were overshadowed by the takeover manoeuvres.

888 grew revenues 9% in the first half of the year but underlying profits fell 17% to $40.9 million (£26.5 million) as the firm took a $14.4 million blow from the Chancellor’s new online-betting tax as well as an extra $5.1 million in European VAT costs. GVC saw higher revenue growth — up 15% — as well as a 14% rise in profits. Bwin’s revenues slipped by 6%.

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August 28, 2015 |
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