bwin.party admits bid talks underway

Four months after last denying rumours it planned to either break up, or sell the business,  bwin.party digital entertainment has now admitted it is in bid talks. It’s also less than a fortnight since the company was included in Interactive Investor's Winter Portfolio, which propels our basket of seasonal outperformers further into the black.

"Further to recent media speculation regarding a possible bid for bwin.party, the board of bwin.party confirms that it has entered into preliminary discussions with a number of interested parties regarding a variety of potential business combinations with a view to creating additional value for bwin.party shareholders," said the firm Wednesday.

"Such discussions may or may not result in an offer being made for the company. However, as all such discussions remain at a preliminary stage, there can be no certainty as to whether or not they will result in any form of transaction with any party."

Bwin was trading at 89.65p when it entered II's Winter Portfolio on 1 November. It's now trading at 119p, up 33%.

Of course, its inclusion was based solely on historical performance between November and April, generating a positive return during those six months in seven of the past nine years.

Analysts were more sceptical. "The continued decline in the group's net cash position is a concern, with Bwin generating little free cash flow," said Panmure Gordon following recent third-quarter results. "Bwin trades on the lowest valuation in the gambling sector, which is justified in our view."

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.