bwin.party Announces “Positive Performance," Keeps The Door Open to 888 Holdings
The bwin.party Group announced it is "pleased" with its business performance for the first half of 2015. According to the company, the implementation of a $15 million cost-cutting and restructuring plan, along with online gaming and mobile performing well, led to positive results and made the company "confident about the prospects for the second half and the outlook for our business."
As explained by bwin.party's CEO Norbert Teufelberger in a note sent to the media last week, the positive results came despite the impact of Europe's new VAT regime and the Point-of-Consume Tax (POC) introduced in the United Kingdom in December 2014.
"Casino betting volumes have remained strong, and in poker we are closing the gap on last year."
"Despite challenging comparatives together with the impact of EU VAT and POC tax, we are pleased with our business performance in the first half [of the year]," Teufelberger said. "We have completed our new organizational set-up and streamlined our decision-making processes, significantly improving our operational performance."
Going more into detail on the group's operations, Teufelberger explained that "casino betting volumes have remained strong, and in poker we are closing the gap on last year," when the company launched an all-new version of its poker client specifically designed with more social features as part of a new strategy to revitalize partypoker as a brand centered around the recreational player.
Things went differently in sports betting, with Teufelberger stating, "Sports volumes are ahead of last year despite the 2014 FIFA World Cup, although poor sporting results drove gross win margins lower, holding back revenue performance in the period."
What did not slow down, however, is the growth of the mobile sector, which in June accounted for one-third of the group's gaming revenue.
"Mobile [and] touch has continued to grow strongly," the note explained. "In June 2015, mobile [and] touch represented 31 percent of total gross gaming revenue, with sports betting at over 50 percent."
"We remain confident about the prospect for the second half and the outlook for our business."
These numbers show signs of remarkable growth, as in June 2014 mobile gaming and sports betting represented 23 percent and 37 percent of total gross gaming revenue respectively.
Teufelberger also spoke about the $35 million deal that saw the World Poker Tour dealt to Hong Kong-listed Ourgame International Holdings Ltd. on June 21.
"We have made good progress on the disposal of our non-core assets with [the] World Poker Tour, Winners, and United Games all sold during the second quarter and we have already reached our target of €30 to €50 million of disposal proceeds."
In Teufelberger's mind, these operations have been significantly important both for the cash they have generated and because they also helped the company "to reduce the complexity within our business."
Last, but not least, Teufelberger mentioned that the company is currently undergoing a significant $15 million cost-cutting program aimed to make the group's operations more efficient and sustainable.
"Our shift to a label-led structure is delivering the operational efficiencies we anticipated and we are on course to generate cost savings for at least $15 million this year."
888 Holdings Wants Back in The Game
Just as Teufelberger was speaking about the positive performance of the company during the first half of 2015, The Sunday Times wrote about the possible sale of the company via a joint venture made by Amaya Gaming and GVC Holdings, which is far from being a done deal.
According to The Sunday Times' Daniel Dunkley, 888 Holdings is ready to jump back in the game and outbid the $1.39 billion offer made by GVC and Amaya on July 7.
"City sources said 888 would meet bwin's management and representatives to try to reach an eleventh-hour agreement."
"The gambling outfit 888 Holdings will make a last-ditch attempt to persuade rival bwin.party to agree to a takeover this week, after falling behind in the £900m bid battle for the poker company," Dunkley writes. "City sources said 888 would meet bwin's management and representatives to try to reach an eleventh-hour agreement, after rival gaming group GVC stole a march and detailed an 110p cash-and-shares offer last week."
The same sources have told the reporter that "GVC has been chosen as the preferred bidder, and 888 would need to convince bwin.party of the merits of the stock component of its offer." Rumors in the City want 888 to improve its previous offer by focusing on "detailing the synergies between the two businesses, particularly the overlap in regulated gambling markets."
The bidding war for bwin.party group may have implications much bigger than the control of well-established brands like partypoker, partycasino, and bwin. Many believe that the destiny of the 888 group is directly tied to the outcome of their bid, meaning if they fail to outbid GVC and Amaya, they could suddenly become a takeover target themselves.
Back in February 2015, the company received a takeover offer by Britain's biggest bookmaker, poker, and casino room William Hill. As confirmed to PokerNews by Alex Brennan, a representative from the London-based financial and corporate PR firm Hudson Sandler, the two companies have been in "advanced talks" for an operation that would cost William Hill approximately 750 million pounds ($1.14 billion), or 210 pence a share.
At that time, however, the offer did not lead to any deal between the two parties, with rumors suggesting that one of the founders of 888 Holdings, the Shaked family, did not want to settle for less than 300 pence a share.