Could Google Enter Gambling Market With bwin.party Takeover?
We reported a few weeks ago on the expected revenue falls of up to 17% by the gambling company bwin.party. While seemingly worrying figures, we also pointed out the overall strategy of Bwin.party which is to focus on less markets which are more profitable. Following this logic the revenue loss is to be expected in the short term as operations are scaled down but the cost cutting measures should payoff in the long run.
To make things even more interesting for bwin.party is the current rumor that the internet Giant Google maybe interested in taking over bwin.party for a 200p in a share cash offer. If true this could be a huge surprise and needless to say the ultimate payday for bwin.party shareholders whose stock is currently trading at around the 100p.
As to the timing of the possible takeover, the speculation is that it would happen before Bwin’s online poker and casino games are launched in New Jersey on November 23 this year. The New Jersey online gambling market is set to be worth around £630 million. Added to this is bwin.party’s expansion plans to other US states and you can see why Google would be eyeing them out.
Whether this rumor is accurate or not, the timing could not come at a better time for bwn.party whose stock price has fallen nearly by 5% in the last few days following Peel Hunt analyst Nick Batram’s warning that Bwin.party’s management “was running out of chances to put things right.”
It will be a groundbreaking event should the world’s largest internet company enters the gambling arena. It is worth noting that just over a year ago, the world’s largest social network Facebook started offering real money gambling which many never thought they would ever contemplate.