Gambling group GVC offers to buy larger rival Bwin for £908m

Gambling group GVC offers to buy larger rival Bwin for £908m -9th July 2015

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SCOTTISH born GVC Holdings chief executive Kenny Alexander is moving closer to pulling off a £908 million deal to buy bigger online gambling rival Bwin.Party Digital Entertainment.

Mr Alexander, originally from Kilwinning and an accountant, confirmed GVC has made a proposal for a cash and shares transaction valuing Bwin at 110 pence per share.

In May Bwin received an approach from 888 Holdings about a potential takeover for an undisclosed sum. As yet 888 has declined to comment on whether it may make another approach for Bwin.

Analyst Nick Batram of Peel Hunt said: "I don't think 110 pence is a price that knocks 888 out of the process, if they really wanted it but equally they had ample time to match or better that bid."

More than two years ago GVC paid around £31 million for Sportingbet's operations in a number of countries as part of a joint deal with William Hill which was valued at £485m.

While noting GVC is still working with Bwin to formalise an offer Mr Alexander said: "Based on our experience with the successful Sportingbet acquisition and restructuring, we believe that the potential combination of GVC and would result in substantial financial and operating synergies and represent an excellent opportunity for both GVC and shareholders."

Mr Alexander suggested the benefits would not be less than €80 million.

Bwin, created by the merger of sports betting group Bwin and online poker group PartyGaming in 2011, had a market value of about £816m pounds as of Wednesday's stock market close, nearly triple that of GVC.

Bwin, which put itself up for sale last year, said its board had considered GVC's proposal and would work with the company to finalise the offer over the coming days.

It provides poker services through its main brand partypoker, along with Bwin poker and the World Poker. It also has brands such as Foxy Bingo and partycasino. The group has had to cope with regulatory pressures in the poker market in Europe.

"It's been a very difficult market for Bwin but its also been a very difficult market for everyone," Mr Alexander said.

He added: "From the GVC perspective, one that excites me the most is Bwin's sports betting brand and that's the brand with enormous potential."

GVC's bid is being backed by Canadian gaming company Amaya, which last year bought online gambling sites PokerStars and Full Tilt Poker.

Mr Alexander said: "Amaya is providing some of the funding to the deal and will obviously take some of the assets from the deal."

Mr Alexander was part of the Kilmarnock Futures Consortium of business people which looked at buying Kilmarnock Football Club, the team he supports.

He has been chief executive of Isle-of-Man based GVC since 2007 and prior to that held senior roles at Sportingbet.

(Herald Scotland)