After weeks of bidding and deliberation, bwin.party has finally sold to the highest bidder. 888 Holdings has acquired bwin.party for $1.4 billion in cash as well as a stock deal. A similar bid was created by GVC and Amaya Gaming but 888 was able to seal the deal. Speaking on the matter, Brian Mattingley, the head of 888, stated that the deal will create one of the world’s leading online gaming operators.
With the transaction, the scale of 888 Holdings is set to increase as well as the products offered. The company should be able to create at minimum $70 million in annual pretax cost savings by the year 2018. Surprisingly, bwin.party turned down a deal from GVC and Amaya which was slightly higher in benefits. However it was the fewer risks and better prospects that set the company to choose 888 as the winning bidder.
As of the announcement of the acquisition, the stock price for 888 rose over 10 percent in London to 177 pence. This was a gain of 17 pence on the same day. Bwin.party’s stock also increased by 2.3% to a total of 105.3 pence.
Alex Dreyfus of Global Poker Index stated that the purchase by 888 was a great move but will still see the company being at least 4 times smaller than PokerStars when considering liquidity. However it gives 888 a quality foundation to reinvest in marketing the company.
The state of New Jersey sees PartyPoker and Borgata working together as well as 888 and WSOP teaming up to create the largest poker networks in the state. With 888 buying bwin.party, additional liquidity should be the result. By merging the online poker platforms, 888 will be able to compete with PokerStars if they finally launch in New Jersey by next year. Both 888 and New Jersey can only benefit from the new acquisition of bwin.party.
One positive of GVC and Amaya Gaming losing out on bwin.party is the company can now focus solely on moving into the state of New Jersey with online poker gaming. If the company had taken on bwin.party, they would have become distracted by having to integrate a third brand into their offerings. While the company may be upset now, in the long run, it will be to their benefit.
Commenting on the new acquisition, the Chairman of bwin.party Philip Yea stated:
PokerScout is a top provider of information of online poker networks as well as poker sites. According to their info, both PartyPoker and 888’s dot-com sites are seventh and second place when it comes to networks based on cash gaming traffic based on seven day running average. Both have just over 3,500 players in ring games for real money combined and this is a huge portion of online poker gamers. However, Amaya holds the market share with 60% of the poker figures based on members of PokerStars and Full Tilt Poker.
The unfortunate fact to Amaya Gaming losing out on bwin.party is that fact that PokerStars could have moved into state of New Jersey much quicker. Now, PokerStars will have to wait for approval, which may not come until 2016.