Despite a higher bid by its rival, 888 Holdings has won the bidding war for bwin.party in a deal worth just under .4 billion in cash and stock.
Bwin agreed to 888’s cash and shares offer worth just over 104p a share or £898.3million despite a higher 110p bid—about ?908 million—by GVC Holdings and Amaya Gaming, the Canadian owner of PokerStars.
The company chose 888 in the hopes its experienced management team will deliver more long-term value for shareholders, company officials said. The 888 deal also presents fewer risks and fewer regulatory constraints to bwin, they said.
In a statement about a possible counter-offer, GVC said it was “considering its options” on bwin.party and that there was “no certainty an offer would be made.”
The chairman of 888, Brian Mattingley, said the deal is “transformational.”
“The enlarged group will benefit from significantly enhanced scale, an improved product offering as well as cost and revenue synergies,” he said. “It’s all about scale. When you’ve got critical mass, you can ride storms. The management of 888 has a well-established track record of delivering outperformance since 2011 and we look forward to working with our new colleagues to create a global leader.”
The two companies said the deal would lead to cost benefits of at least $70 million per annum by the end of 2018 by removing duplicated costs, technology and administration fees.
The deal still requires regulatory and shareholder approval.
In the U.S., 888 Holdings is essentially buying its main—and only—competitor in the three states that allow online poker—New Jersey, Delaware and Nevada—and will now control almost all of the online poker play in the U.S.
If Amaya and PokerStars had won the bidding, it could have eased the company’s entrance into the U.S. market.
888’s concentration of play in the three states could remove any opposition to New Jersey entering into the shared-player agreement for online poker already reached by Delaware and Nevada.