Bwin.party in Sales Negotiations

Following the rumors about a bid for the Bwin.party, online operator has been forced to reveal its hand through a regulatory announcement. The announcement confirmed the speculations about potential sale / partnership that could happen in the near future.

Bwin.party were reserved in their statement, explaining that these discussions do not have to necessarily end in an offer being made for the company. Further announcements will be made as and when appropriate.

However, after the release became public, company’s shares moved up 12 percent in London. While the company itself remains reluctant to openly talk about the offers, according to some speculations, Toronto-listed Amaya Gaming Group is almost certainly one of the bidders.

According to ftaplhaville.ft.com report, bwin.party would fit perfectly into strategic market takeover that the Amaya Group has been implementing. However, with the just recently concluded purchase of PokerStars, it would be a strange timing to extend themselves even further.

Another potential suitor according to traders’ speculations is the gambling software group Playtech. The speculations were given life after the Group announced it was raising €315 million from the sale of a convertible bond.

According to Nick Batram, analyst at stockbroker Peel Hunt, the bond issue was a “clear sign that a major acquisition is far more likely than any further special dividends or share buy backs”. (telegraph.co.uk). Apart from bwin, another potential target for Playtech could also be Ladbrokes.

Playtech has stated repeatedly that they are planning to use the excess cash on the balance sheet to make an acquisition, and the time to put that plan into motion may have arrived.

As for the bwin.party, it is no secret that the company has been struggling for some time now to find a right approach and have made quite a few unpopular decisions that may have led to decline in profits. Selling the company or entering the right partnership could be exactly what they need to get back in the game.

If Amaya rumors turn out to be true and they actually succeed in the acquisition, they will basically take over the market completely. They are already a dominating force as owners of PokerStars and Full Tilt, but this would cement their position. The question is if they are willing to take the risk.

On the other hand, Playtech could be looking to try and seize the bigger share of the market themselves and this could potentially create some balance in the very unbalanced situation present at the moment.