M & A activity is once again a hot topic of discussion in the industry, following a report by The Telegraph that William Hill is to finance a bid to purchase OpenBet by its fellow provider NYX Gaming Group.
Investment firm Morgan Stanley is said to be overseeing an auction process for OpenBet, with Playtech also rumoured to be interested in buying the Chiswick-based company.
The current customers of the OpenBet sports book will have concerns that if ownership fell into a competitor’s hands, they may lose some integrity over customers’ dataWawrick Bartlett
The Telegraph reported that OpenBet could be sold for between £250m and £300m.
With much of this saga still up in the air, we wanted some experts to give a clear view of things.
Here are the views of three industry analysts, who offer insight as to how the move could be perceived by other companies and how the situation may pan out.
David Jennings, analyst at Davy Research:
“Any branded B2C operator taking control of OpenBet is probably going to be the least-favoured outcome among the other operators that use OpenBet. That said, from an investor standpoint, the market would need to be convinced that the returns on such an acquisition stack up, regardless of the strategic benefits of completing such a transaction. That might be a tricky case to make if the mooted figure ends up being correct.”
Steve Donoughue, gambling consultant:
“The inevitable consolidation of the online gambling industry looks like claiming another one of its victims with the news that NYX, partnering with William Hill, are looking to purchase OpenBet. OpenBet were one of the builders of the online sports book industry, claiming practically all the main bookmakers as their clients and have happily continued to do so with a reputation as being one of the ‘good guys’.
“My concern about this purchase is that this may no longer be the case in the future. NYX know little about sports book, hence their interest. William Hill do, but arguably not on the technology side of it, as they still struggle to roll out Project Trafalgar and are basically just Playtech retreads.
“So how will Openbet manage to keep good at what they’re good at when their acquirers may just subsume them in their corporate worlds? Las Vegas is a long way from Chiswick. Also, how does the William Hill/NYX partnership work? Is it just an investment or will there be a demand for OpenBet technology at the expense at all others? In a world where OpenBet was part of the resistance fighting the evil empire that is Playtech, will a Death Star blow up Chiswick’s piece of Alderaan?”
Wawrick Bartlett, CEO, Global Betting and Gaming Consultants:
“The current customers of the OpenBet sports book will have concerns that if ownership fell into a competitor’s hands, they may lose some integrity over customers’ data. The betting industry would most likely want another sale to private equity. But a private equity buyer would need some assurance that there is growth left in the market to make such a proposition attractive, unless they wanted a pure dividend play.
“William Hill’s reported offer to NYX is attractive because if the terms of the agreement are transparent and can assure NYX’s independence then OpenBet should be able to retain its customers and the deal would project NYX, which has a value of £65m, into the big league of software providers to the gambling industry.”
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