Bwin.Party Investor Says GVC Needs To Raise Bid

August 1st, 2015 | by Kaycee James

bwin.party GVC Holdings Jason Ader Sheldon Adelson

One of bwin.party’s largest shareholder managers is Jason Ader, a hedge fund executive who said GVC needs to up its offer for any potential acquisition. (Image: Reuters/Mike Segar)

Bwin.party has issued 825 million ordinary shares of stock, and Jason Ader, along with his investors through his hedge fund SpringOwl Asset Management, oversees more than five percent of them, making him the second-largest shareholder.

But when it comes to bluntness, no stakeholder is more outspoken.

This week the asset executive said the GVC Holdings bid of $1.6 billion for bwin.party was “just enough to have a conversation,” and that for a deal to be reached the multinational gambling and sports betting group would need to significantly raise its offer.

“I would want a much bigger premium,” Ader told Bloomberg. “There are a lot of risks and uncertainties with this GVC bid.”

Got 99 Problems and Bwin Is One

Ader isn’t the type of investment manager that purchases large positions in companies and then takes a back seat to their operations. In fact, he’s an activist investor who has a physical seat on the bwin.party board of directors.

A long vocal critic of the bwin.party executive team, and perhaps rightfully so as the company’s shares were cut in half between 2009 to 2014, Ader demanded four seats on the board last April.

Bwin awarded his firm one seat, to which he appointed Daniel Silvers, president of SpringOwl.

GVC’s offer of 122.5 pence per share toppled that of 888 Holdings of roughly 110 per, translating to about a $150 million raise and valuing bwin at nearly $1.6 billion.

For a company that generated just over $110 million in net earnings in 2014, a six percent decline from 2013, that valuation might seem reasonable to some, but not Ader who says the bid needs to be closer to 140 pence per share.

The Adelson Connection

Like most things in gambling, Sheldon Adelson, the billionaire casino magnate and owner/chairman of the Las Vegas Sands, is directly related to Ader’s dealings.

The leading proponent of the Restoration of America’s Wire Act (RAWA), the federal bill that would outlaw all forms of Internet betting including online poker, Adelson elected Ader to his board of directors in April 2009.

“Jason is a gaming industry expert and we are pleased he is joining the Las Vegas Sands Corp. Board of Directors,” Adelson said at the time, a stark contrast from his current views on those involved with Internet gambling.

“As an industry leader, and more importantly as a father, grandfather, citizen and patriot of this great country, I am adamantly opposed to the legalization and proliferation of online casino gaming,” Adelson wrote in 2013. “It’s a threat to our society, a toxin which all good people ought to resist.”

Adelson’s influence through campaign contributions have rubbed off on 2016 presidential candidates Senators Lindsey Graham (R-South Carolina) and Marco Rubio (R-Florida), two backers of RAWA, but so far he hasn’t been able to persuade Ader into supporting Internet gambling prohibition.

Only time will tell if Ader is a more convincing body and whether his pressuring of GVC to raise its bwin.party offer will ultimately come to fruition.