Bwin.party acquisition Amaya or Playtech

Bwin.party says it has entered into “preliminary discussions” over a possible takeover. Amaya Gaming is rumored to be a likely contender, with Playtech also named. (Image: stoiximaonline.com)

Bwin.party is the belle of the ball this week, as rumors swirl that online monster Amaya Gaming is preparing a $1.2 billion takeover. But there are simultaneous whispers of a Playtech bwin.party acquisition, keeping the online gaming community on pins and needles till the matter is put to bed.

Amaya’s name was first mentioned on Wednesday by analysts on the Markets Live real-time financial information service on the London Financial Times website.

FT Alphaville Editor Paul Murphy and Bryce Elder from the FT’s London markets team dropped the bombshell, stating that market chatter was suggesting that the deal was “all but wrapped up,” according to “usually reliable sources.”

“We now think it’s real enough,” said Murphy. “[There have been] lots of rumors of an approach, as repeated a few times in the paper’s influential Bowler Hat column. Though we didn’t have a name. Amaya’s a good name.”

However, it should be noted that the announcement has been flagged as a “Raw Alert,” which means, according to the accompanying FT boilerplate, that the information that “has not been formally tested through traditional journalistic channels (PRs, etc).”

The plot thickened with a report in London’s Evening Standard on Wednesday naming market-leading software company Playtech as a potential buyer.

“Online gambling software maker Playtech today announced it was raising a $315 million war chest, via a convertible bond issue, for acquisitions and ‘organic opportunities,’ ” it stated. “An earlier edition of the Evening Standard reported down-on-its luck online gaming peer Bwin could be a takeover, and just a few hours later it confirmed it was ‘early’ talks with a number of potential suitors that could result in the company being sold.”

Reader Beware

“The story might be complete rubbish,” continues the FT disclaimer, “but if we believe there is some substance to it we will say so. Either way, Reader Beware.”

While bwin.party, along with Borgata, is the market leader in the New Jersey online gaming space, it has struggled in other markets recently.

The product of a merger between online sports betting giant bwin and the once-mighty partypoker, (which in 2005 was worth over $12 billion, before UIGEA sent it retreating from the US market), bwin.party has had to fend off rumors of a sale of part or all of its assets since as far back as last June. However, following the new speculation in the press this week, the company confirmed that a sale is indeed on the cards.

Bwin.party Statement

“Further to recent media speculation regarding a possible bid for bwin.party, the Board of bwin.party confirms that it has entered into preliminary discussions with a number of interested parties regarding a variety of potential business combinations with a view to creating additional value for bwin.party shareholders,” it said. “Such discussions may or may not result in an offer being made for the Company. However, as all such discussions remain at a preliminary stage, there can be no certainty as to whether or not they will result in any form of transaction with any party.”

Shares in bwiin.party, which have seen a steady rise throughout November, shot up by 13 percent in the aftermath of the company’s announcement on Wednesday.

Should rumors prove to be true, Amaya would increase its monopoly on the global online poker market and pull even further away from its nearest competitors 888.com and the iPoker Network. PokerStars, which was acquired by Amaya this year for $4.9 billion, currently has eight times the traffic of 888.com.