Activist investors could trigger Bwin.party break-up

Activist investors SpringOwl Gibraltar Partners B have agreed in principle to acquire 6.1 per cent of Bwin.party’s share capital, fuelling rumours that the company is on the verge of being broken up to realise value for shareholders.

SpringOwl is buying the shares from Emerald Bay Limited and Stinson Ridge Limited, companies connected with Bwin.party founders Ruth Parasol DeLeon and Russell DeLeon and certain trusts which they have established.

As part of the transaction SpringOwl will also be assigned the right to appoint one director to the Bwin board as contemplated by the New Relationship Agreement entered into between Emerald, Stinson, Bwin and others on 20 July 2010.

Analyst Ivor Jones at Numis thinks the investment will trigger a restructuring to release ‘value from the component parts’. He explained that there was several aspects of the business that would be of use to individual companies, such as the US-facing business, the technology platform, operations in both low- and high-risk markets, payments business Kalixa, the sports media rights business and the social gambling business.

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