July 29, 2010

PartyGaming to merge with bwin

PartyGaming and bwin Interactive Entertainment plan to merge, creating the world's largest listed online gaming business.

The enlarged group will be owned approximately 48.36% by PartyGaming and and 51.64% by bwin shareholders and will be listed on the London Stock Exchange.

Irrevocable undertakings in support of the proposed merger have been received from shareholders holding 28.5% of PartyGaming and 14.4% of Austrian-listed bwin.

Jim Ryan, CEO of PartyGaming, said, 'This is a transformational opportunity for both our companies to create the world's largest listed online gaming business.

'With market-leading positions in poker, sports betting, casino and games (in particular bingo), the enlarged group will have a winning formula to exploit the growing online gaming market, supported by a strong balance sheet, significant cashflow generation and a highly experienced management team.'

Norbert Teufelberger, co-chief executive of bwin, said, 'This merger of equals makes great strategic, operational and financial sense.

'We will be in pole position to capitalise on the wealth of opportunities that will flow from the continued evolution and expansion of the global online gaming industry.'

Ryan and Teufelberger will jointly head the merged group.

The merger is expected to be significantly earnings enhancing for both companies pre-amortisation. Annualised synergies are estimated at 55m.

Pro forma 2009 net gaming revenue was 682m with EBITDA of 196m before synergies.

The proposed merger will be effected by merging bwin into PartyGaming, which will continue to be domiciled in Gibraltar.

bwin shareholders will receive 12.23 new PartyGaming Shares for each bwin Share. The merger is classified as a reverse takeover for PartyGaming under UKLA rules.

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