888 raises the stakes in Bwin bidding war

Online gambling company 888 has upped the stakes in its £1bn takeover battle with GVC by raising its bid for Bwin.Party.

Bwin, which offers poker, bingo and sports betting online, revealed on Tuesday that 888 had made a revised takeover proposal and that it was now evaluating the bid. It must weigh the offer against a competing proposal submitted by Sportingbet owner GVC, which is gate-crashing a deal already agreed between Bwin and 888.

The terms of 888’s revised cash-and-shares approach have not been not disclosed, although it is understood that the company has lifted the paper element of its offer to increase the value of its bid to around 115p a share. Bwin said the proposal came with “a number of pre-conditions” that are thought include an increase in the break fee to about 1pc of the overall deal value.

GVC, which is much smaller than Bwin and so would need to structure the deal as a reverse takeover, is understood to have made its latest cash-and-shares bid on Friday evening. The gambling group said its offer valued Bwin at 131p a share and a spokesman for GVC said the bid "is without conditions which 888 has now introduced".

The latest twist in the takeover saga marks a success for Bwin’s board, which has effectively engineered a bidding war between 888 and Aim-listed GVC.

Although Bwin recommended an £898.3m offer - the equivalent of 104.09p a share - from 888 in mid-July, rival suitor GVC refused to concede defeat and made a takeover proposal worth about £1bn last month.

Bwin’s board and shareholders had concerns with GVC’s bid, including questions over whether the combined business will secure a main market listing on the London Stock Exchange and a New Jersey gambling licence. However, Bwin kept the takeover battle alive by working with GVC to overcome those worries.

Once satisfied with GVC's proposal, Bwin last Thursday incited another round of bids from both suitors by inviting the Sportingbet owner to make a formal offer on its “best terms”.

Bwin, which has been up for sale since last November, said it would now consult with its “key shareholders” over coming days to decide which of the two competing proposals is in investors’ “best interests”.