(Reuters) - Gambling group Bwin.Party Digital Entertainment Plc BPTY.L, at the center of a takeover battle between its rivals, said GVC Holdings Plc (GVC.L) had offered to buy it in a cash and stock deal valued at 908 million pounds ($1.4 billion).
GVC’s proposal could increase the chances of a bidding war with rival 888 Holdings (888.L), which made a proposal in May to buy Bwin for an undisclosed amount.
888 declined to comment on whether it planned to make a counter bid.
“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,” analyst Nick Batram of Peel Hunt said.
GVC’s proposed offer shows how consolidation is hotting up across the gambling industry, with fast-growing online players searching for scale and more traditional gambling firms looking for ways to bolster services and cushion the impact of tighter regulation and higher taxes in Britain.
GVC’s Chief Executive Kenneth Alexander told Reuters he expected the potential deal to provide benefits of not less than 80 million euros ($88.47 million).
GVC has offered 110 pence per share, representing an 11 percent premium to Bwin’s closing price on Wednesday.
Bwin’s shares were up 2.6 percent at 101.7 pence on the London Stock Exchange, while GVC rose 0.5 percent.
Bwin, created by the merger of sports betting group Bwin and online poker group PartyGaming in 2011, had a market value of about 816 million pounds as of Wednesday’s 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 finalize the offer over the coming days.
Bwin 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 its poker market in Europe.
“It’s been a very difficult market for Bwin but its also been a very difficult market for everyone,” GVC’s CEO said.
“From the GVC perspective, one that excites me the most is Bwin’s sports betting brand and that’s the brand with enormous potential,” Alexander said.
GVC’s bid is being backed by Canadian gaming company Amaya Inc AYA.TO, which last year bought online gambling sites PokerStars and Full Tilt Poker.
“Amaya is providing some of the funding to the deal and will obviously take some of the assets from the deal,” Alexander said.
Reporting by Aastha Agnihotri in Bengaluru; Editing by Gopakumar Warrier and Jane Merriman