Fresh doubts over Bwin deal after GVC shares plunge

GVC’s takeover offer is now almost identical in value to the one BwinParty rejected from the bigger bidder, 888

The decision by the board of online casino company BwinParty to accept a £1bn takeover offer by its far smaller rival GVC has been thrown into renewed question as the value of the bid plunged due to the bidder’s weak share price.

GVC’s takeover offer is now almost identical in value to the one BwinParty rejected from the bigger bidder, 888, calculations by The Independent show.

GVC’s shares have tumbled since its offer was accepted. As much of its bid was to be funded by BwinParty’s shareholders accepting GVC shares instead of cash, the whole value of its offer has sunk, too.

From valuing Bwin at 130p a share at the time of the bid, it has now fallen to just 116p. Meanwhile, shares in 888 have remained fairly steady, so its suggested cash and shares offer would still have been at the level of around 115p-116p which was rejected by Bwin.

The collapse in GVC’s shares has also meant heavy paper losses for investors who bought £150m of new stock in the bidding company as part of its financing for the deal.

At the time of accepting the offer, Bwin management said it was not all about the value of the deal. GVC’s plan would bring cost savings through quicker than 888, it said. However, observers have questioned the logic of choosing a far smaller player to take it over. GVC is expected to break off PartyGaming’s casino operations and sell them in order to focus on the sports betting business. Such a break-up would not have been necessary with the 888 proposal, as the business would have been strong in both sports and casino betting.