888.L Regulatory News (888)

18 May 2015 09:21

Exane BNP Paribas upgraded Bwin.Party on Monday to 'neutral' from 'underperform' saying that if a deal place takes with 888, it would be a clear positive for Bwin."The growth outlook is challenging and Bwin faces taxation headwinds in regulated countries. However, we upgrade the stock to neutral as the company could be taken over soon," said Exane. "We have always thought that a sale of the company in one block would be difficult given the mix of assets/regulated and non-regulated activities within the group and the different appetites of potential buyers," it noted. "That said, the presence of two different bidders makes a sale highly likely, either in one single transaction or by splitting the assets." Both GVC Holdings and 888 have submitted bids for Bwin. The prospect of a bid or the outbreak of a bidding war is likely to support the shares, said Exane. It added that if a deal takes place, it would impact the entire sector. Firstly, it could trigger other deals, as the acquirer may want to offload some of Bwin's assets at a later stage. Secondly, it could potentially justify higher trading multiples for online-exposed gaming companies, which appear relatively cheap at the moment, said Exane, pointing to William Hill and Ladbrokes.