Amaya’s bwin.party news is a wait-and-see proposition, says Dundee

Amaya (Amaya Stock Quote, Chart, News: TSX:AYA) is fast becoming known for hyper-aggressive moves, but it is too early to tell if its latest will become the positive that investors have grown used to, says Dundee Securities analyst Eyal Ofir.

This morning, Amaya confirmed that it will jointly finance a bid with U.K.-based sports betting and gaming group GVC Holdings to acquire bwin.party.

Ofir says the immediate impact of the news is mixed, partly because of the lack of detail provided, and by the fact that at least one competitor, 888 Holdings, is rumoured to be pursuing the same asset.

bwin.party Digital Entertainment is an online gambling company that was formed by the March, 2011 merger of PartyGaming plc and Bwin Interactive Entertainment AG. The company posted revenue of €611.9 million in 2014.

“Until we see the final terms and structure and if the bid actually wins, it is very difficult to figure out true impact,” said Ofir. “Until then, the shares may be range bound and potentially under pressure today on this announcement.”

Ofir notes that various articles suggests this would be a cash and stock deal, with the cash supplied by Amaya and the stock by GVC. He says information circulating says GVC would be charged with restructuring bwin.party, an arrangement he says would allow Amaya’s PokerStars personnel to remain focused.

In a research update to clients today, Ofir maintained his “Buy” rating and one year target of $52.00 on Amaya.

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