After denying that they were involved in merger talks last December, it would appear that the rumours might in fact be true and that PartyGaming and Bwin are now in the process of finalising a deal for this summer.
The Format magazine article where the story was broken, cites an unnamed official close to the discussions stating that; “The merger should be wrapped up this summer,” and that the negotiations were now at an “intensive phase.”
If the deal comes to fruition, then the merger between the two giant companies would produce an internet gaming colossus worth around$4 billion, with Bwin currently valued at £1.2 billion and PartyGaming around £1.1 billion.
Most importantly, the new company would then be able to offer a more complete gaming service to their customers in order to consolidate their positions within the internet gaming market. Austrian gambling operator Bwin is particularly strong in sports betting, while Gibraltar-based PartyGaming specialises in offering poker and casino games.
Back in 2009 time when speculations first arose as to a potential merger deal, PartyGaming were careful not to encourage too much speculation at a time when talks were not guarenteed to succeed. At the time a Party Gaming spokesman was quoted as saying:
“The board of Party Gaming confirms that it is continuing to hold discussions with a number of companies in the gaming sector regarding potential consolidation opportunities. As all such discussions remain at a preliminary stage, there can be no certainty as to whether or not such discussions will result in any form of transaction.”
Now it would seem summer could see the emergence of the new “mega-company,” which would be of great interest to PartyGaming investors who have seen the value of their shares plummet since the UIGEA was introduced to the US market in 2006, effectively wiping out 90% of the company’s customer base.
Despite the breaking story, shares in either company remained largely unaffected with Party Gaming shares currently trading at 312.1 pence, and bwin Interactive Entertainment holding at €41.2. Both companies did, however, see positive moves in their share prices back in December when the rumours first began to circulate.
