GVC, Bwin.Party, 888 and Greece

There have been a couple of interesting developments regarding the GVC/Amaya takeover bid for Bwin.Party.

The first, is that GVC and Amaya now have an offer on the table…£900 million made up of 45% cash and the rest in shares.

This news comes via the Financial Times, not an announcement from parties involved in the deal. Indeed the official line from GVC is strictly no comment, with a company spokesperson saying, “we’re still in discussions with Bwin.Party and we’re not commenting on the details of those discussions.”

GVC and Amaya, initially in discussions with Bwin.Party as individual suitors, later teamed up in a joint bid and are now looking to beat out 888 Holdings who have also expressed interest.

The second development, is that the GVC/Amaya bid may be impacted by the circus of events unfolding in Greece right now. Here’s why.

Turns out GVC has a significant exposure to the Greek sports betting market. Revenue from Greek punters accounts for around 10% of their total revenues, and with current capital controls imposed by the Tsipras government those revenues have collapsed. This is only a very recent collapse, but of course the concern would be that if there is a Grexit (which is looking more likely by the hour), the resulting banking collapse may make this a longer term problem.

Shares in Aim listed GVC dropped 3% today following a company announcement which read,

“Following the recent imposition of capital controls by the government restricting the movement of funds both within and outside of Greece, the company notes that it has registered a softening in player activity in that territory,”

GVC/Amaya may need to beef up the cash portion of their offer…or kick in a few extra shares!