Update: BWIN AND PARTY GAMING PRESENT MERGER PLAN


How to create a billion-worth Euro online gambling giant?

The merger plan details, including the timeline, budget forecasts and shareholders’ options, have been announced by Bwin Interactive Entertainment AG and Party Gaming plc, alongside the expectations regarding the resulting annual synergies which are anticipated to total approximately Euro 55 million, with three quarters of this amount to be achieved in the financial year 2012, and full synergies from 2013.

Just published merger plan contains all relevant information, and can be downloaded together with other documents from Bwin’s corporate website at www.bwin.org.

Bwin’s Executive Board has scheduled an Extraordinary General Meeting for 28 January 2011 in order to recommend its shareholders to vote for the merger. Following the expected approvals of the proposed merger by the general meetings of both Bwin and Party Gaming, all shareholders holding bwin shares will receive 12.23 Party Gaming shares denominated in GBP for each bwin share after the merger becomes legally effective – most likely towards end of the first quarter of 2011. This share swap will be performed automatically and without charge.

It has been also announced that shareholders who do not wish to become shareholders in Bwin.Party can sell their shares beforehand on the Vienna Stock Exchange or exercise their entitlement to a cash settlement set at the amount of Euro 23.52. Reportedly, the adequacy of the exchange ratio and the cash compensation amount has been assessed and confirmed by independent experts.

According to some estimates, this merger will produce the world's largest online gambling corporate, with pro forma unaudited net revenues in 2009 from continuing operations of Euro 696.2 million, pro forma unaudited Clean EBITDA from continuing operations of Euro 193.7 million, and pro forma unaudited profit after tax from continuing operations of Euro 99.4 million (excluding transaction costs) for the year ended 31 December 2009 and pro forma unaudited net assets as at 31 December 2009 of Euro 1,276.7 million (after consolidation adjustments).

The prospectus has been released in a circular to shareholders.

Both sides are positive that they are about to "....create the world's largest publicly listed online gaming group that will be ideally positioned to take advantage of the rapid consolidation of the online gaming industry and to open up new markets around the world," as per the statement given on the occasion of merger plan announcement.

Norbert Teufelberger, Co-CEO of Bwin, said: “Our products and target markets complement one another perfectly, and we can continue to expand our technology lead in all key product segments: sports betting, poker, casino, bingo and games.”

Commenting on the current trends, he observed: “The online gaming industry is going through a phase of consolidation, making market players’ size and geographic diversification more crucial than ever.

"The new company will operate worldwide with its existing brands under the name of Bwin.Party Digital Entertainment plc, in which current Bwin shareholders are expected to hold 51.7 per cent of the shares and current Party Gaming shareholders 48.3 per cent.

“Our many years of online know-how, healthy balance sheet, and one of the largest pools of poker liquidity in any regulated market will make us an attractive business partner,” Teufelberger concluded.

Teufelberger and Jim Ryan, PartyGaming’s current CEO, are going to head up the company as the Co-CEOs.

Bwin.party will have its headquarters in Gibraltar and be listed on the London Stock Exchange. Besides a clear focus on business-to-consumer products, the company will also steadily expand its business-to-business and business-to-governments business.

The business operations of Bwin in Austria will be retained, where a newly founded subsidiary, Bwin Services AG will support selected areas of the group in Vienna.

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