Bwin.party share price jumps on spinoff rumours
Share price has risen 24% since last Friday due to rumours over plans for unregulated markets
Bwin.party has seen its share price rise 24% since last Friday amid rumours it is poised to spin off its unregulated business.
Rumours in the UK press and on social media made reference to a potential spinoff of its grey market business, just three months after the operator blocked new sign-ups from a number of dot.com markets.
The Financial Times reported on the rumours yesterday citing traders as a source and suggested the move would help the firm “attract a broader investor base”.
A spokesperson for bwin.party declined to comment, but sources close to the matter poured cold water on the speculation.
The operator has continued to focus its efforts on regulated and to-be-regulated markets, with the move initially having an adverse impact on group revenues. The first-quarter total of 180.2m represented a 17% fall compared to Q1 2012.
“As we optimise the shape and size of our business across a more focused European footprint we are reducing our marketing spend significantly,” Teufelberger said at the time.
“Instead of acquiring new customers in more than 30 markets, we will focus on around 10.”
After floating at £1.94 a share in March 2011, bwin.party has seen its share price hit by regulatory uncertainty in key markets such as Germany, however it is now flirting with £1.40 again for the first time since late May.
The share price had been languishing below £1.20 until New Jersey Governor Chris Christie issued a conditional veto ahead of approving the state’s egaming regulation in February this year, and the operator hopes to be live in the Garden State from day one.
New Jersey is on track to open up in November this year, and bwin.party has US-focused partnerships with land-based operators, MGM and Boyd Gaming. Boyd CEO Keith Smith reiterated following his firm’s Q2 results yesterday that “If [bwin.party] are able to launch their own product there, they will do that, if that’s approved by the regulators.”