Bidding war for online gambling’s Bwin.party intensifies

British online gaming company GVC Holdings Plc raised its offer to buy rival Bwin.party Digital Entertainment Plc for a second time in two weeks, hoping to persuade the company to reject 888 Holdings Plc's offer.

GVC's latest offer, backed by U.S. private equity firm Cerberus Capital Management, is worth $1.6 billion in cash and stock and is only slightly higher than its previous offer.

Still, Bwin had accepted 888 Holdings's $1.39 million offer, saying GVC's offer is too complex and has less attractive growth prospects.

Bwin could use GVC's latest offer to coax a higher offer from 888, said Simon Davies, an analyst with Canaccord Genuity.

"It is at a materially higher rate than the 888 offer so I would expect the (Bwin) board to use this as leverage to see if 888 might be prepared to raise their offer. I think it's unlikely to be the end of (the bidding war)."

The bidding war highlights a move towards industry consolidation to try and offset higher taxes and tighter regulation in Britain.

Bwin has itself struggled with the decline of regulated poker markets in Europe and has had to make cost cuts. It follows, therefore, that Bwin would also consider cost benefits in evaluating the two offers.

Bwin and GVC said on Friday they were working to evaluate GVC's offer. GVC expects a reply in 5-10 business days.