Breakup of Bwin.Party Possible With Activist Fund Taking Stake in Company
The Financial Times of London is reporting that a New York-based activist hedge fund will be taking a stake in struggling Bwin.Party.
SpringOwl, which is managed by the activist fund Cumberland Associates, has “agreed in principle” to purchase around 6.1 per cent of Bwin.Party from the group’s founders, Ruth Parasol and Russ Deleon.
As part of the deal, SpringOwl will have the right to appoint one director to the board.
Ivor Jones, analyst at Numis, the company’s broker, said that a restructuring of the group that “releases value from its component parts” was made “more likely” by the hedge fund’s move.
The Financial Times suggests the group could opt to spin off Bwin.Party’s New Jersey-based business or even breaking the group into two parts, one that accepts customers from regulated markets and another part that accepts players from so-called “grey areas”.
A spokesperson for SpringOwl told the Financial Times: “We think the shares are undervalued and we look forward to working with management and the board.” Cumberland Associates, the hedge fund behind SpringOwl, said that it “typically adopts an active approach” to its investment.
Shareholders appeared to welcome the news with shares in Bwin.Party jumping 5.3 per cent to 119p.
- Aaron Goldstein, Gambling911.com
