Proposed merger of bwin and PartyGaming

Transcription

1 Proposed merger of bwin and PartyGaming 29 July 2010

2 Disclaimer This document comprises written materials/slides for a presentation concerning the proposed merger of PartyGaming Plc and bwin Interactive Entertainment AG ( bwin ) (the Proposed Merger ). This document is an advertisement and not a prospectus or a prospectus equivalent document. This presentation is not intended to, and does not, constitute or form part of an offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security, or a solicitation of any vote or approval in any jurisdiction. Neither this document nor the making of the presentation constitutes a recommendation regarding any securities of PartyGaming or bwin or any other entity. This document and the presentation are being made only to and directed only at (a) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order ) or (b) persons falling within Article 49(2)(a) of the Order or (iii) other persons to whom it may otherwise lawfully be communicated (each such person being a relevant person ). This document is being supplied to you solely for your information in connection with the Proposed Merger. This document and its contents are confidential and may not be further copied, distributed or passed on to any other person or published or reproduced directly or indirectly, in whole or in part, by any medium or in any form for any purpose. Some of the information in this document is still in draft form and has not been legally verified and will only be finalised at a later date prior to completion of the Proposed Merger. No reliance may be placed for any purpose on the accuracy, completeness or fairness of the information or opinions contained herein or communicated in relation hereto and no representation or warranty, express or implied, is or will be given by any of PartyGaming, bwin, Deutsche Bank AG ( Deutsche Bank ), McQueen Limited ( McQueen ) or their respective affiliates or their respective officers, employees agents or advisers or any other person in relation to such information and opinions, and any reliance you place on them will be at your sole risk. Certain statements, beliefs and opinions contained in this document and in the presentation are or may be forward-looking statements and as such involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance and achievements of PartyGaming and/or bwin to be materially different from future results, performance or achievements express or implied by such forward-looking statements. No statement contained in this document or expressed in the presentation is intended as a profit forecast. None of PartyGaming, bwin, Deutsche Bank or McQueen undertakes any obligation (except as required by the FSA, the London Stock Exchange plc, the Listing Rules or any other applicable law) to revise or update any information contained in this document or in the presentation, regardless of whether that information is affected as a result of new information, future events or otherwise. The distribution of this document or any information contained in it may be restricted by law, and any person into whose possession any document containing this presentation or any part of it comes should inform themselves about, and observe, any such restrictions. The PartyGaming shares to be issued in connection with the Proposed Merger have not been, and will not be, registered under or offered in compliance with applicable securities laws of any state, province, territory or jurisdiction of Canada, Australia or Japan and no regulatory clearances in respect of the such PartyGaming shares have been, or will be, applied for in any jurisdictions other than the UK and Austria. Accordingly, unless an exemption under the relevant securities laws is applicable, such PartyGaming shares are not being, and may not be, offered, sold, resold, delivered or distributed, directly or indirectly, in or into, Canada, Australia or Japan or to, or for the account or benefit of, any person resident in Canada, Australia or Japan. The Proposed Merger between PartyGaming and bwin relates to the shares of non-us companies and is subject to the disclosure requirements applicable in Austria, Gibraltar and the United Kingdom to statutory mergers, which differ from the disclosure requirements of the United States. Any financial information included in this document has been prepared in accordance with international financial reporting standards and thus may not be comparable to the financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States. It may be difficult for investors to enforce their rights and any claim they may have arising under the US federal securities laws. PartyGaming is a Gibraltar company, and some or all of its officers and directors are residents of countries other than the United States. Investors may not be able to sue a non-us company or its officers or directors in a non-us court for violations of the US securities laws. It may be difficult to compel a non-us company and its affiliates to subject themselves to a US court s judgment. Deutsche Bank is acting as sponsor, corporate broker and financial adviser to PartyGaming and no-one else in connection with the Proposed Merger and will not be responsible to anyone other than PartyGaming for providing the protections afforded to the clients of Deutsche Bank nor for providing advice in relation to the Proposed Merger or any other matter referred to herein. McQueen is acting as financial adviser to bwin and no-one else in connection with the Proposed Merger and will not be responsible to anyone other than bwin for providing the protections afforded to the clients of McQueen nor for providing advice in relation to the Proposed Merger or any other matter referred to herein. By attending the presentation and/or accepting and/or accessing this document you (a) agree to the above and (b) represent and warrant that you are a relevant person (as defined above). 2

3 Agenda Introduction and overview Rationale for the deal Merger benefits Leadership, strategy and vision Deal structure Conclusion 3 29/07/ :38:52

4 Key leadership here today Norbert Teufelberger Jim Ryan Manfred Bodner Martin Weigold Current role: Co CEO bwin Current role: CEO PartyGaming Current role: Co CEO bwin Current role: CFO PartyGaming 4 29/07/ :38:52

5 World s largest listed online gaming business Leading brands in poker, sports betting, casino and games Scale across all key territories Well-positioned to exploit all key channels Pro forma 2009 net gaming revenue of 682m, EBITDA of 196m (1) Estimated pre-tax synergies of 55m per annum Note (1): Before reorganisation costs, non-cash charges related to share based payments and impairment costs, and costs associated with PartyGaming s Non- Prosecution agreement Definition: Net Gaming revenue defined as turnover minus customer winnings, bonuses, gaming taxes and license fees Source: Company financial reports. All combined numbers are pre-synergies. All as of year end /07/ :38:52 5

6 Key financial overview Party bwin Combined Based on FY09 ( m) NGR (1) EBITDA (2) Net Cash Combined NGR ( m) % Poker % Sports % Casino % Bingo / games 48 7% % Unrivalled market reach with clear future growth potential Note (1): Net Gaming Revenues Note (2): Before reorganisation costs, non-cash charges related to share based payments and impairment costs, and costs associated with PartyGaming s Non- Prosecution agreement Definition: Net Gaming revenue defined as turnover minus customer winnings, bonuses, gaming taxes and license fees Source: Company financial reports. All combined numbers are pre-synergies. All as of year end

7 Agenda Introduction and overview Strategic rationale for the deal Merger benefits Leadership, strategy and vision Deal structure Conclusion 7 29/07/ :38:52

8 In a growing, global market, scale matters $bn 400 All Gambling (Land-based and Interactive) Percentage Interactive 10,0% 300 7,5% 200 5,0% 100 2,5% E 2011E 2012E 0,0% Source: H2 Gambling Capital June /07/ :38:52 8

9 and is necessary in all key verticals Skill-Based, Commercial Lotteries and Other Gaming Bingo Casino Poker Betting $bn E 2011E 2012E Source: H2 Gambling Capital June /07/ :38:52

10 Regulatory and competitive shifts The opening of several markets favours broadlybased, well-capitalised international groups International expansion is likely to continue with development of ring-fenced, regional networks Increased scale and breadth will expand opportunities for growth in both B2C and B2B As new markets open, new local competitors will emerge 10

11 Agenda Introduction and overview Strategic rationale for the deal Merger benefits Leadership, strategy and vision Deal structure Conclusion 11

12 Merger benefits 1 Creates the world s largest listed online gaming business 2 3 A well-balanced revenue base, by product and territory Best of breed B2C offer in all product verticals 4 Estimated annual pre-tax synergies of 55m 5 Leading player liquidity in online sports and peer-to-peer games 6 A large pool of executive talent 7 A strong and stable capital structure to fund future growth A market leader poised to exploit further market growth 12

13 The clear market leader Net Gaming Revenues ( m) Enlarged Group William Hill (online) Sportingbet Ladbrokes (online) 888 (online) Unibet Playtech Betsson 2009 EBITDA ( m) Enlarged Group Playtech William Hill (online) Ladbrokes (online) Sportingbet Unibet Paddy Power (online) Betsson 888 (online) Source: Company reports, Deutsche Bank analysis. All combined numbers are pre-synergies Note : Sportingbet 2009 refers to last twelve months data as of January Betsson and Paddy Power s GGR adjusted by 90% to determine NGR. Note: Playtech does not report NGR figures, above represents Revenue 13

14 Merger benefits market leader Poker (by NGR 2009 in m) (1) Casino (by NGR 2009 m) (3) Enlarged Group Party bwin 888.com Unibet Sportingbet Betsson 0 Enlarged Group Party 888.com bwin Betsson Unibet Sportingbet Sports betting (by NGR 2009 in m) (2) Bingo Enlarged Group bwin Sportingbet Unibet Betsson Party 888.com (1) (3)Source: Company financial reports Market leading positions in each of the 4 key verticals 14

15 Merger benefits well-balanced revenue base Pro forma 2009 net gaming revenue by product Party ( m) bwin ( m) Combined pre synergies ( m) Poker Sports 29% 7% 33% Poker Sports Casino Casino Games/Bingo 31% Games / Bingo Total Highly complementary revenue mix brings increased strength across all products Party benefits from bwin s sports betting bwin benefits from Party s casino and bingo Both benefit from increased scale in poker Source: Company financial reports. Note: All combined numbers are pre synergies. 15

16 Merger benefits well-balanced revenue base Pro forma 2009 net gaming revenue by key territory Germany UK Greece Canada Italy* France* Other Party (% revenues) bwin (% revenues) Combined pre synergies (% revenues) Germany 18% 31% 25% UK 16% <1% 7% Greece <1% 11% 7% Italy* 2% 9% 6% Canada 14% <1% 6% France* 4% 7% 5% Other 46% 40% 43% Well-balanced mix across territories that have, or are expected to regulate Well-positioned to further develop the enlarged group s B2B offering to international customers *France and Italy newly regulated markets Source: Company analysis. 16

17 Merger benefits - natural strategic fit By product By territory By channel Improved revenue mix with increased strength across all products Party benefits from bwin s sports betting bwin benefiting from Party s casino and bingo Combined poker liquidity will be clear leader excluding US-facing sites Complementary positioning across key markets in Europe Breadth and depth across other markets Well-positioned to enter the US market should regulations allow Strong presence through multiple B2C internet brands across all verticals B2B/B2G momentum, with recent landmark deals in Italy and France WPT events broadcast in over 200 countries, marquee sponsorship of Real Madrid, MotoGP Expanding presence via mobile, and other platforms such as social media Scale offers opportunity to invest in new channels A market leader poised to exploit further market growth 17

18 Financial synergies of 55m per annum Expected gross pre-tax cost synergies of approximately 42m per annum through: Removal of duplicated costs Scale economies in purchasing Cross-fertilisation of best of breed practices Revenue synergies of approximately 13m through: Cross-selling Margin improvement Exploiting new distribution channels Adopting best of breed across all product verticals Synergies to be phased over two-year period following completion, with substantially all synergies expected to be achieved in the first full financial year 18

19 Agenda Introduction and overview Rationale for the deal Merger benefits Leadership, strategy and vision Deal structure Conclusion 19

20 Leadership and expertise Jim Ryan Jim Ryan: Co-CEO Norbert Teufelberger: Co-CEO c. 30 years experience in online gaming sector In-depth knowledge of all B2C products and also B2B Intimate understanding of regulatory dynamics in key territories Combination of financial background with creativity and entrepreneurialism Significant business development expertise (both organic and M&A/alliances) 20

21 Strategy and vision our roadmap Deliver cost and revenue synergies to plan Business to be organised along key product verticals Drive existing business focused on regulated and to-be regulated markets Deliver the best customer experience, building confidence in core brands Leverage market-leading B2C offering in all product verticals Position the Enlarged Group so that it can enter the US market Expand B2B/B2G revenue streams Exploit new distribution channels (mobile, social media) Invest in future development through a dedicated innovation lab Develop long-term partnerships with sports organisations Further consolidate the online gaming sector through M&A A market leader poised to exploit further market growth 21

23 Overview of the proposed merger Merger of equals - bwin shareholders will own 51.6% of the enlarged Group and PartyGaming shareholders will own 48.4% Equal Board representation with a newly appointed independent Chairman Irrevocables (1) over 28.5% of PartyGaming and 14.4% of bwin already in favour Enlarged Group will be incorporated and managed in Gibraltar The Company to have a premium listing on the London Stock Exchange (2) Founders agree to take steps to satisfy licensing requirements Completion expected in first quarter of 2011 (1 )Commits shareholders to vote shares held at the time of the respective EGM in favour of the merger (2 )Subject to Admission 23

24 Key conditions for completion Receipt of an independent expert s report Shareholder approval from shareholders of both PartyGaming and bwin Employee consultation processes Regulatory/competition considerations Admission of the new PartyGaming shares and re-admission of the existing PartyGaming shares 24

26 World s largest listed online gaming business The transformational deal in online gaming Clear market leader with the scale, brands, expertise and capital to exploit regulated and to be regulated markets Compelling strategic and operational fit Significant financial benefits Substantial opportunities ahead A market leader poised to exploit further market growth 26

27 Global brands, global players, global business 29 July 2010