Bwin, PartyGaming Talk Down Merger Rumors

Online gambling giants Bwin and PartyGaming have moved quickly to hose down speculation in the British press about an impending merger.

The Times and Sunday Times reported over the weekend that the two companies were in talks to complete a £2 billion merger (both are currently worth around £1 billion each).

But Austrian-based Bwin, which has gone from strength to strength in the 10 years since its founding, was quoted by international news agency Reuters as saying that it is not in advanced merger talks with anyone, including PartyGaming, but that it does believe there will be more consolidation in the online gambling sector.

Other Deals?
Despite the denials, analysts believe there are some big merger deals on the horizon, which could include the two companies.

Reuters quoted Nick Bartram of stockbroking firm KBC Peel Hunt as saying that recent sector consolidation will continue in 2010, leading to the likelihood of "further sizable deals."

"We have already see Bwin acquire Gioco for its geographic strength in Italy, while PartyGaming purchased Cashcade to develop its bingo presence," Bartram said.

"Bwin's strength in sports means that it would be an ideal partner for Party. But even if it is not Bwin and Party, there will be further deals. Given Party's market position and management ambition we continue to rate the shares a buy."