UK-listed online gambling operator Bwin.party saw its shares nosedive on Friday, falling as low as 78p before rallying somewhat to close at 83.75p. That represents an 18% decline from Friday’s starting price and not far off the previous record low of 80p last August.
The share plunge is believed to be the result of unidentified suitors deciding to break off acquisition talks. Companies including Playtech, William Hill, Ladbrokes and Canada’s Amaya Gaming have all been rumored to be sniffing around the underperforming Bwin.party but so far it’s been all smoke and no fire.
On Friday, Dealreporter quoted banking and gaming industry sources saying at least some of the would-be suitors lost interest in kicking Bwin.party’s tires after discussions failed to progress. Bidders reportedly had “a serious look” at acquiring Bwin.party’s sports betting and bingo divisions but balked at taking on the company’s struggling PartyPoker unit, which was described as being in “free-fall.” PartyPoker’s revenue fell 25% in Q3 and projections are for a further 25% decline in 2015.
A Bwin.party spokesperson denied that it no longer had anyone to talk to, telling eGaming Review that “in the event that talks had concluded” the company would be “obliged to update the market.” Translation: Bwin.party’s still talking, only it’s not clear if anyone’s still listening.
Bwin.party’s board is believed to be pushing for an all or nothing deal, contrary to the suggestion made last summer by activist Jason Ader, who pushed for the company to get back into the grey markets it exited in 2013. Suggestions have been made that Bwin.party would be wise to split in two, with one division handling regulated markets and the other making lots of green in the greys.
UK-facing firms have already seen one confirmed and another potential mega deal this year, with Canada’s Intertain acquiring Gamesys’ Jackpotjoy and Starspins brands for £425m, while 888 Holdings’ board has confirmed receiving a £744m takeover bid from William Hill. For some time now, Playtech has been stockpiling cash for a major acquisition and recently raised €315m via a bond issue to further boost its bargaining power, but its intentions remain unknown.
Meanwhile, PartyPoker is prepping a major UK marketing push in a bid to boost the vertical’s sagging profile. The plan is to team with the Dusk Till Dawn poker room in Nottingham and hopefully convince more live players to take their action online. PartyPoker will splash lots of branding around the DTD club while PartyPoker will host a dedicated tab carrying DTD’s online satellites and tournaments.