(Corrects paragraph 4 of July 27 story to say that the company
has cut costs, not struggled with cost savings)
* GVC makes 122.5p/share offer for Bwin
* Says Cerberus Capital to provide 400 mln-euro loan
* Cost savings to exceed 135 mln euros per annum
By Aastha Agnihotri and Neil Maidment
LONDON, July 27 (Reuters) - Online gambling firm GVC
Holdings GVC.L returned on Monday with a new 1 billion-pound
($1.55 billion) bid for rival Bwin.party Digital Entertainment
BPTY.L , looking to trump a recently accepted offer from 888
888.L .
Bwin, put up for sale last year, accepted a cash and stock
deal worth almost 900 million pounds from online casino and
poker firm 888 this month, shunning an earlier 908-million-pound
offer from GVC and Canada's Amaya Inc AYA.TO , which it deemed
too complex and with less attractive growth prospects.
ID:nL4N0ZX23Y
The tussle for Bwin is the latest in a flurry of merger
activity in the industry, a trend likely to continue as firms
seek to expand to offset increasing taxes and tighter regulation
in Britain. Last week Ladbrokes (LONDON:LAD) and Gala Coral agreed a $3.4
billion all-share merger. ID:nRSa1209Ua ID:nL5N1040ZM
Bwin, which has struggled with the decline of regulated
poker markets in Europe and has cut costs since its creation via
a merger of sports betting group Bwin and online poker group
PartyGaming in 2011, confirmed on Monday that it had received a
new offer from GVC and would respond in due course.
888 declined to comment on whether it planned to raise its
offer, though analysts said they widely expected it to do so.
"This is a real statement of intent from GVC. The proposed
premium over the accepted offer by 888 is such that the
bwin.party board will probably have no choice but to reconsider
its acceptance of the 888 offer," Davy Research analysts said.
"We would be surprised if 888 does not come back with a
counter-offer of its own."
GVC said it would finance the new deal through a combination
of new GVC shares and a 400 million-euro ($443 million) senior
secured loan from private equity firm Cerberus Capital
Management CBS.UL , removing Amaya's involvement and some of
the complexity that had worried Bwin.
GVC, whose boss Kenny Alexander told the Financial Times on
Monday that Bwin and several of its shareholders had been keen
for GVC to return to talks, also plans to raise 150 million
pounds through an equity placing to fund restructuring costs and
refinance existing debt at Bwin.party.
BATTLE FOR BWIN
GVC's offer of 122.5 pence per share, consisting of 25p in
cash and the rest in new GVC shares, is 18 percent higher than
888's offer price of 104.09 pence.
The firm, whose shares listed on London's junior AIM market
give it a market value which is less than a third of Bwin's,
said the deal would lead to cost benefits worth more than 135
million euros ($150 million) a year by the end of 2017, more
than double 888's estimated cost savings of $70 million.
U.S. activist investor Jason Ader, whose SpringOwl vehicle
is among Bwin's five biggest shareholders, said GVC's new offer
was still not enough and he would still prefer 888 if there was
no further improvement in the bidding.
"If this was a 135p-140p price (from GVC) that might be
enough for the Bwin shareholders to get comfortable with all the
uncertainties. The 122p price is probably not enough, but it's
enough to get the Bwin board's attention," Ader told Reuters.
He added that the onus was on Bwin's board to push GVC
higher and invite 888 to reconsider its own offer.
Bwin's shares were up 2.4 percent at 111.2p by 1454 GMT,
when GVC's share price was down 1.6 percent at 418p.
($1 = 0.9089 euros)
($1 = 0.6442 pounds)
(Editing by Mark Heinrich and Greg Mahlich)