PartyGaming and bwin put out an announcement this morning insisting that their merger will be going ahead as planned, saying that “the process is on track and the merger is expected to complete in the first quarter of 2011″.
The companies said they had "become aware of some speculation in the market" that the deal would not go through but that the two management teams were working on completing the deal as quickly as possible.
The two companies announced they would merge their business on 29 July 2010 and that they expected to achieve annualised synergies of 55 million euros through the merger.
The initial reaction to the merger was positive with both companies’ share prices seeing a considerable bounce but since then the share price has ticked back down to previous levels, with both companies losing 20 per cent of their value in the past nine days. PartyGaming’s shares hit 309 pence immediately after the announcement but following this morning’s news that the merger was still on track they were down 5.2 per cent on the day at 226.5 pence, valuing the company at £926 million. Bwin’s shares were trading at 30.80 euros in lunchtime trading.
A merger of PartyGaming and bwin will create Europe’s largest online betting company with a significant presence in the online sports betting, casino, poker and bingo markets. However it remains to be seen how the companies, which are culturally very different, will join together to exploit the strengths of each firm and trim of the not so strong elements of each firm.
Both companies are regarded as market leaders in their fields.
PartyCasino.com and PartyPoker.com are the flagship brands of PartyGaming. PartyGaming is the world's leading igaming company and is listed on the London Stock Exchange.
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