The rumour mill is currently working overtime regarding the imminent buyout of Cashcade, one of the leading names in the online bingo world. Reports from eGaming review suggest that the proposed takeover could go ahead as soon as next week, with PartyGaming now placed as the frontrunner ahead of 888.com.
With further pressure from the Independent News Media group, which holds a 20% stake in Cashcade, due to their own unstable financial position, it seems like any deal will most definitely occur sooner rather than later. It is stated that INM, which runs the flailing Independent Newspaper has a clause in their shareholdings of Cashcade, which could force through a sale of their company if the need arose, the probability of which is highly likely considering the debts surrounding INM.
Cashcade currently run a portfolio of successful bingo brands, including Foxy Bingo, Think Bingo and the pioneering free to play site Cheeky Bingo. Following recent awards wins at the Online Bingo Awards last week, Cashcade looks like an attractive proposition for any company expanding or consolidating their online bingo position. Foxy Bingo is currently the no2 online bingo brand, second only to Gala Bingo, and earlier it was confirmed that Cashcade had reported a 91 percent jump in revenues to GBP 33.7 million, with pre-tax profits doubling to GBP 10.9 million.
As such, the current estimated value of Cashcade would be somewhere between £70 and £100 million. Initially, 888.com was considered the strongest contender for acquiring Cashcade, as Cashcade already have a contract with 888.com for software licensing. However, following a recent decision in the US in favour of PartyGaming, it seems like the private equity option is a lot viable according to analysts, especially as it is reported that 888.com are currently facing difficulty receiving the financial backing required to stump up cash for the asking price.
Some are suggesting that the deal will signal the beginning of the monopolisation of the online bingo world, with PartyGaming already owning a successful online bingo site as well as popular sites for casinos and poker. As such, experts suggest PartyGaming would be in a prime position to capitalise by leveraging its audiences across each of these sectors. PartyGaming have also recently announced their plans to help Channel 5 launch their online bingo proposition, and have in the past been the backing behind the recently closed ITV Bingo.
The news will come as alarming to other bingo operators keen to acquire leadership in a fiercely competitive and growing market, but will no doubt help improve the stock of PartyGaming itself, which had steadily climbed over the last week due to the Channel 5 deal, closing in the US on Friday at $260.75 a share, up from $235.75 at the start of the week.
However, speaking at the recent Online Bingo Summit, Cashcade founder Simon Collins dismissed rumours of an imminent sale of the online bingo business, despite all the media speculation. Mr Collins had stated that “he was hopeful of a positive outcome to ongoing negotiations” and that while talks were progressing “any deal could still be sometime away”. He was also quick to point out the strong partnership that already existed between 888.com and Cashcade, and indications were that any buyout would most likely be completed in the third quarter of the year. Already the takeover has sparked a series of twists and turns, and it seems like the speculation may play out a little longer in the online bingo world.
Really very interesting and informative!