Prior Notice of Merger

RNS Number : 1505Q

PartyGaming Plc

29 July 2010

 

 

29 July 2010

Proposed Merger

of

PartyGaming Plc ('PartyGaming') and bwin Interactive Entertainment AG ('bwin')

Highlights

·; Creation of the world's largest listed online gaming business

·; Market leading positions in all key verticals of online poker, sports betting, casino and games (in particular bingo)

·; Pro forma 2009 net gaming revenue of €682 million[1] and EBITDA of €196 million, before synergies

·; Estimated annualised synergies of approximately €55 million

·; Proposed Merger is expected to be significantly earnings enhancing for both companies pre-amortisation

·; Enlarged Group to be owned approximately 48.36 per cent. and 51.64 per cent. by PartyGaming and bwin shareholders respectively and will be listed on the London Stock Exchange

·; Jim Ryan and Norbert Teufelberger to be Co-Chief Executive Officers of the Enlarged Group

·; Irrevocable undertakings in support of the Proposed Merger have been received from shareholders currently holding 28.5 per cent. and 14.4 per cent. of PartyGaming and bwin's existing issued share capital respectively

Commenting on the Proposed Merger, Jim Ryan, Chief Executive Officer of PartyGaming said:

"This is a transformational opportunity for both our companies to create the world's largest listed online gaming business. With market-leading positions in poker, sports betting, casino and games (in particular bingo), the Enlarged Group will have a winning formula to exploit the growing online gaming market, supported by a strong balance sheet, significant cashflow generation and a highly experienced management team."

Commenting on the Proposed Merger, Norbert Teufelberger, Co-Chief Executive Officer of bwin said:

"This merger of equals makes great strategic, operational and financial sense. We will be in pole position to capitalise on the wealth of opportunities that will flow from the continued evolution and expansion of the global online gaming industry."

Enquiries:

PartyGaming	bwin
Peter Reynolds, Director of Corporate Affairs	Konrad Sveceny, Head of Investor Relations
John Shepherd, Director of Corporate Communications	Katharina Riedl, Head of Corporate Communications
Tel: +44 (0) 20 7337 0100	Tel: +43 (0) 50 858 200 17
Deutsche Bank (Financial Adviser and Corporate Broker to PartyGaming)	McQueen (Financial Adviser to bwin)
Alastair Mathieson, James Davies	George Fleet, Simon Croft-Baker
Charles Wilkinson, Mumtaz Naseem (Corporate Broking)
Tel: +44 (0) 20 7545 8000	Tel: +44 (0) 20 7484 8800

 

Analyst meeting, webcast, dial-in and conference call details: 29 July 2010

There will be an analyst meeting for invited UK-based analysts at Deutsche Bank, 1 Great Winchester Street, London EC2N 2DB starting at 12.00 noon BST. There will be a simultaneous webcast and dial-in broadcast of the meeting. To register for the live webcast, please pre-register for access by visiting the Group website (www.partygaming.com). Details for the dial-in facility are given below. A copy of the webcast and slide presentation given at the meeting will be available on the Group's website later today.

Dial-in details to listen to the analyst presentation: 29 July 2010

11.50 am	Please call +44 (0) 203 003 2666 UK Toll Free 0808 109 0700
Title	PartyGaming/bwin
12.00 noon	Meeting starts

 A recording of the meeting will be available for a period of seven days from 29 July 2009. To access the recording please dial the following replay telephone number:

Replay telephone number	+44 (0) 208 196 1988
Click here for international replay numbers
Replay passcode:	6939753#

 

International Conference call: 29 July 2010

For international analysts and investors there will also be an opportunity to put questions to Jim Ryan, Chief Executive Officer of PartyGaming, and Norbert Teufelberger, Co-Chief Executive Officer of bwin, by way of a conference call. The details of the call are as follows: 

6.50 pm	Please call +44 (0)203 003 2666 UK Toll Free 0808 109 0700
7.00 pm	Conference call starts

 A recording of the conference call will be available for a period of seven days from 29 July 2010. To access the recording please dial the following replay telephone number:

UK Replay telephone number	+44 (0)208 196 1988
Click here for international replay numbers
UK Replay passcode:	9129104#

All times are British Summer Time.

IMPORTANT NOTICES

This announcement does not constitute a prospectus or prospectus equivalent document. Holders of shares in PartyGaming and bwin are advised to read carefully the formal documentation in relation to the Proposed Merger once it has been published.

The benefits of the Proposed Merger referred to in this announcement have been calculated on the basis of the existing cost and operating structures of the companies and by reference to current prices and the current regulatory environment. These statements relate to future actions and circumstances which, by their nature, involve risks, uncertainties and other factors. Because of this, the cost reductions referred to may not be achieved, or those achieved could be materially different from those expected. These statements should not be interpreted to mean that the earnings per share in the first full financial year following Completion, or in any subsequent period, would necessarily match or be greater than those for the relevant preceding financial period.

Deutsche Bank AG is authorised under German Banking Law (competent authority: BaFin - Federal Financial Supervisory Authority) and authorised and subject to limited regulation by the Financial Services Authority. Details about the extent of Deutsche Bank AG's authorisation and regulation by the Financial Services Authority are available on request. Deutsche Bank is acting as financial adviser and corporate broker 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 matter referred to herein.

McQueen, which is authorised and regulated in the United Kingdom by the Financial Services Authority, 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 matter referred to herein.

Deutsche Bank and McQueen make no representations, express or implied, with respect to the accuracy or completeness of any information contained in this document and accept no responsibility or liability for, nor do they authorise, the contents of this document (or its issue), or for any other statement made or purported to be made by them (or any of them), or on their behalf, in connection with PartyGaming, bwin, the PartyGaming Shares, the New PartyGaming Shares or the Proposed Merger.

Overseas jurisdictions

This announcement does not constitute an offer to purchase, sell or exchange or the solicitation of an offer to purchase, sell or exchange any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Proposed Merger or otherwise, nor shall there be any purchase, sale or exchange of securities or such solicitation in any jurisdiction in which such offer, solicitation, sale or exchange would be unlawful prior to registration or qualification under the laws of such jurisdiction.

The distribution of this announcement in jurisdictions other than the UK, Austria or Gibraltar may be affected by the laws of relevant jurisdictions. Therefore any persons who are subject to the laws of any jurisdiction other than the UK, Austria or Gibraltar will need to inform themselves about, and observe, any applicable requirements. Except as required by applicable law, copies of this announcement are not being, and may not be, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction. Persons receiving this announcement (including, without limitation, custodians, nominees or trustees) should observe these restrictions and should not send or distribute documents in or into any Restricted Jurisdiction.

In particular, the New 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 New 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, the New 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.

Notice to US investors

The Proposed Merger between PartyGaming and bwin relates to the shares of a foreign company and is subject to the disclosure requirements of a foreign country that are different from those of the United States. Any financial information included in this document has been prepared in accordance with foreign accounting 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 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.

Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the "Securities Act"), or pursuant to an exemption from such registration. The New PartyGaming Shares to be issued in connection with the Proposed Merger are not, and will not be, registered under the Securities Act or under the securities laws of any jurisdiction of the United States and will be issued to bwin Shareholders in the United States in reliance on the exemption from registration provided by Rule 802 under the Securities Act and in reliance on available exemptions from any state law registration requirements. The securities of PartyGaming and bwin have not been, and will not be, registered under the Securities Act or under the securities laws of any jurisdiction of the United States.

Forward-looking statements

Certain statements contained in this announcement constitute "forward-looking statements". In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "prepares", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. Investors should specifically consider the factors identified in, or incorporated by reference into, this document which could cause actual results to differ before making an investment decision. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of PartyGaming, bwin and/or of the Enlarged Group, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding PartyGaming's, bwin's and/or the Enlarged Group's present and future business strategies and the environment in which PartyGaming, bwin and/or the Enlarged Group will operate in the future. Such risks, uncertainties and other factors will be set out more fully in the formal documentation in relation to the Proposed Merger. These forward-looking statements speak only as at the date of this announcement. Except as required by the FSA, the London Stock Exchange, the Listing Rules or any other applicable law, PartyGaming and bwin expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this document to reflect any change in their expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

29 July 2010

Proposed Merger

of

PartyGaming Plc ('PartyGaming') and bwin Interactive Entertainment AG ('bwin')

 

1. Introduction

The Boards of PartyGaming and bwin are pleased to announce that they have agreed the basis of a proposed merger of both companies (the 'Proposed Merger'). The Proposed Merger, which is conditional, inter alia, on approval from both sets of shareholders, would create the world's largest listed online gaming business that before synergies had pro forma net gaming revenues in 2009 of €682 million[2] and EBITDA of €196 million.

Irrevocable undertakings to vote in favour of the Proposed Merger have been received from certain of the PartyGaming and bwin Directors who hold shares in their respective companies and from certain other shareholders currently representing, in aggregate, 117,490,777 PartyGaming Shares and 5,171,500 bwin Shares, representing approximately 28.5 per cent. of the issued share capital of PartyGaming and 14.4 per cent. of the issued share capital of bwin, respectively. Further details of these irrevocable undertakings are set out in Appendix I of this announcement.

PartyGaming and bwin believe that the Proposed Merger will generate significant strategic and financial benefits that will combine to enhance the Enlarged Group's immediate and long-term prospects. The Enlarged Group will have leading positions in online poker, sports betting, casino and games (in particular bingo). In addition, it is expected that the Proposed Merger will deliver substantial financial synergies and is expected to be significantly earnings enhancing (before amortisation) for the benefit of all shareholders of the Enlarged Group.

2. Background to and rationale for the Proposed Merger

Since it emerged in the mid-1990s, the online gaming industry has grown strongly in many countries to become a mainstream form of entertainment for millions of adults around the world. Much of this growth has occurred since 2000, driven by accelerated broadband internet penetration, significant investment in consumer marketing by the leading online gaming companies, the adoption of regulatory frameworks by a number of governments and increasing consumer confidence in eCommerce generally. This combination has prompted significant shifts in the shape of both the regulatory and competitive landscapes for online gaming and added impetus to the industry's expansion. Global online Gross Gaming Yield, excluding the US, has grown from an estimated €3.4 billion in 2003 to €13.9 billion in 2009 and is expected to reach approximately €20.1 billion by 2012[3].

 

3. Regulatory landscape

Whilst the legal status of online gaming in many territories remains unclear, several governments around the world have recognised the popularity of playing real money games online and have begun to take a more active role in creating appropriate regulatory frameworks that seek to promote consumer choice, protect the customer, keep out crime and raise tax revenues. Several governments are also now looking to capitalise on the popularity of online gaming by developing their own consumer offer and generating online revenues directly.

In recent months, there have been new proposals for regulatory regimes in a number of countries around the world, including the United States, Canada, Denmark, France, Ireland, Italy and Spain. The Boards of PartyGaming and bwin believe that the online gaming industry is now entering a new phase of development, one that will contain more regulated territories, each with different requirements where private, publicly-quoted and state-owned gaming operators will be able to compete.

4. Competitive landscape

As the scale and profitability of the global online gaming market have increased, state-owned gaming businesses have emerged and land-based groups have shifted into the online arena in addition to both regionally-focused pure online operators and large international online gaming groups. With over 2,000 gaming websites estimated[4] to be operating across multiple jurisdictions, the Boards of PartyGaming and bwin believe that the online gaming market is poised for consolidation and expect that this is likely to take place over the next few years through customers gravitating to the larger and more popular sites but also through corporate mergers and acquisitions.

In this evolving landscape, the prime success drivers historically have included first-mover advantage, player liquidity, attractive and scaleable technology, innovative marketing campaigns, experienced management, and products that are available via multiple distribution channels, in multiple languages and currencies. The increasing scale and complexity of the online gaming market means that the most successful online gaming companies of the future are likely to have all of these attributes. In addition, they are likely to be large, well-capitalised and international businesses that can command market-leading positions in the key product verticals.

5. Rationale for the Proposed Merger

It is against this background that both PartyGaming and bwin believe that the Proposed Merger represents a transformational opportunity for both companies and their respective shareholders. By combining their complementary skills and businesses, the Proposed Merger will create:

·; The world's largest listed online gaming business

- The Enlarged Group would be the world's largest listed online gaming business with market-leading positions in each of its four product verticals: poker, sports betting, casino and games (in particular bingo)

- Before synergies, the Enlarged Group would have pro forma 2009 net gaming revenue of €682million[5] and EBITDA of €196 million

·; A well-balanced revenue base by product, territory and channel

- The geographic spread and product mix of PartyGaming and bwin are highly complementary and, as a result, the combination of both businesses will create a well-balanced revenue mix

- In addition to large B2C operations, the Enlarged Group is well positioned to develop further its B2B offering to international corporate customers and governments

·; Estimated gross annualised pre-tax synergies of approximately €55 million

- The PartyGaming Directors and bwin Directors believe that the Enlarged Group should be able to achieve gross pre-tax cost synergies (before amortisation) of approximately €42million per annum, through the removal of duplicated costs, scale economies of purchasing, and cross-fertilisation of best-of-breed practices

- PartyGaming and bwin also believe that meaningful revenue synergies of at least €13 million per annum will also be available through cross-selling best-of-breed games across both companies' customer bases, by achieving similar gross win margins on PartyGaming's sports betting business as is achieved by bwin, through exploiting new distribution channels such as mobile and from improved international coverage that is likely to prove important in winning B2B contracts in new markets

- It is estimated that the realisation of these synergy benefits will be phased over the two year period following Completion with substantially all synergies expected to be achieved in the first full financial year

·; One of the largest pools of player liquidity in online peer-to-peer games

- Greater player liquidity should create a network effect, improving the customer appeal of the Enlarged Group's poker and bingo products and should also help to create even larger progressive jackpots in casino and bingo games

- A large sports betting customer base is also important as it ensures a well-balanced portfolio of risk, reducing gross win volatility and ensuring that odds offered are competitive

·; A large pool of executive talent

- As the online gaming market has expanded so the need for highly-skilled executives has also increased. The respective management teams of both PartyGaming and bwin are already recognised as two of the most experienced in the industry. By coming together, the Enlarged Group could be expected to become a first choice for the industry's most talented executives and this could further improve the Enlarged Group's ability to innovate and expand

·; A strong and stable capital structure

- The Enlarged Group will benefit from a strong balance sheet, which will enable it to further drive growth in a highly competitive market

- Given its scale and improved balance of revenue in terms of product and territory, PartyGaming and bwin expect that the Enlarged Group will be well placed to access the capital markets to fund further investment and development

·; Continued market consolidation

- The scale benefits of the Proposed Merger will mean that the Enlarged Group will be in an excellent position to further consolidate the online gaming industry, leveraging its strong balance sheet, cashflow and management expertise

·; Well-positioned to enter new markets, including the US

- PartyGaming, bwin, their respective Founder Shareholders and certain of their directors have entered into a RPA under which, if required by any regulatory body as a pre-condition of licensing, they have agreed to take appropriate steps in order to satisfy such licensing requirements (which may include the disposal of some or all of their Shares)

- The Enlarged Group is a market leader in all key product verticals but with a particular strength in online poker through:

§ proven and scaleable technology

§ ownership of PartyPoker.com, and World Poker Tour, two of the most recognised poker brands in the US

§ a database of over 12 million poker players in the US

§ management expertise and experience of the US poker market

6. Proposed strategy for the Enlarged Group

The immediate focus for the Executive Management of the Enlarged Group after Completion will be to ensure that the momentum is maintained in the existing businesses and that synergies already identified are realised as planned. Whilst the detailed strategic plan for the Enlarged Group will be formulated over the coming months ahead of Completion, the complementary fit from both a product and geographic standpoint means that the strategy for the Enlarged Group will reflect core elements of the current business strategies of both PartyGaming and bwin including:

Ø Organising the Enlarged Group along key product verticals

Ø Driving the existing business with a focus on regulated and to-be regulated markets

• Delivering the best customer experience, building confidence in core brands

• Leveraging the market-leading B2C offer in all product verticals

• Positioning the Enlarged Group so that it can enter the US market

• Expanding B2B and B2G revenue streams

• Exploiting new distribution channels (mobile, social media)

• Investing in future development through a dedicated innovation lab

Ø Developing long-term partnerships with sports organisations

Ø Participating in the further consolidation of the online gaming sector through M&A

 

It is intended that further details regarding the strategy for the Enlarged Group will be included in documents to be sent to all shareholders of PartyGaming and bwin ahead of the bwin EGM and the PartyGaming EGM to approve the Proposed Merger.

7. Financial effects of the Proposed Merger

The Proposed Merger is expected to be significantly earnings enhancing (including synergies and before the amortisation of intangibles) for both PartyGaming Shareholders and bwin Shareholders in the first full year following Completion.

8. Governance and management

The boards of PartyGaming and bwin have agreed a balanced management structure for the Enlarged Group, drawing upon the considerable management strength of both groups. While this will not at first comply with the provisions of the UK CGC relating to board composition, the Enlarged Group intends to comply in all material respects with the UK CGC by 31 December 2011. If by 31 December 2011, the composition of the board of the Enlarged Group does not satisfy the recommendations set out in the UK CGC, the composition of the board of the Enlarged Group will be changed to satisfy such recommendations.

The board of the Enlarged Group will be led by Jim Ryan and Norbert Teufelberger who will be Co-Chief Executives. Martin Weigold will be Group Finance Director and Joachim Baca will be Chief Operating Officer. It is intended to appoint a new independent, Non-Executive Chairman who will join the board of the Enlarged Group upon Completion. Excluding the Chairman, there will be equal executive and non-executive representation from the current PartyGaming Board and the current bwin Board. Manfred Bodner will become a non-executive director on the board of the Enlarged Group and will be involved in transition and integration management.

Manfred Bodner, Rami Lerner (who was nominated to the PartyGaming Board by the PartyGaming Founder Shareholders) and Georg Riedl (who will be nominated to the board of the Enlarged Group by Androsch Stiftung) will be considered non-independent for corporate governance purposes. The current service contracts of Jim Ryan and Martin Weigold, as existing PartyGaming Directors, will remain in place as will the appointment letter with Rami Lerner. Details of the key terms of the service contracts of Jim Ryan and Martin Weigold are set out in PartyGaming's annual report and accounts for the year ended 31 December 2009, which can be accessed via the PartyGaming website at www.partygaming.com. The service contracts of Norbert Teufelberger and Manfred Bodner have been agreed and will be summarised in the documents to be made available to the PartyGaming and bwin Shareholders.

9. Summary of Proposed Merger terms

It is intended that the Proposed Merger will be effected by bwin being merged into PartyGaming, in connection with which, on Completion, PartyGaming will take the form of a European Company or Societas Europaea ('SE'). On taking the form of an SE, PartyGaming will continue to be domiciled in Gibraltar where the central management and operational headquarters of the Enlarged Group will also be located.

In consideration for their agreement to the Proposed Merger, it is proposed that bwin Shareholders will receive New PartyGaming Shares in accordance with the Exchange Ratio. The Exchange Ratio shall be approximately 12.23 New PartyGaming Shares for each bwin Share (see Appendix VI for supporting calculation). On Completion, the New PartyGaming Shares will be admitted to the Official List of the UKLA and to trading on the London Stock Exchange's main market for listed securities. Based on the undiluted issued share capital on 28 July 2010, being the last Trading Day prior to this announcement, PartyGaming Shareholders would hold approximately 48.4 per cent. and bwin Shareholders would hold approximately 51.6 per cent. of the issued shares of the parent company of the Enlarged Group. It is expected that Completion will occur during the first quarter of 2011.

The Proposed Merger is classified as a reverse takeover for PartyGaming pursuant to the Listing Rules of the UKLA. Consequently, PartyGaming will be required to re-apply for the listing of the existing PartyGaming Shares and satisfy the relevant requirements for listing. On Completion, therefore, the listing of the existing PartyGaming Shares will be cancelled and the existing PartyGaming Shares will be re-admitted to the Official List of the UKLA and to trading on the London Stock Exchange's main market for premium listed securities. PartyGaming and bwin expect the existing PartyGaming Shares and the New PartyGaming Shares to be allocated to the premium listing segment of the Official List of the UKLA on Completion. PartyGaming and bwin also expect that PartyGaming, as the parent company of the Enlarged Group, will continue to qualify for inclusion in the FTSE UK Index Series.

Completion of the Proposed Merger will be subject to a number of conditions, including:

• 75% approval of the transaction by separate meetings of the PartyGaming and bwin Shareholders;

• the receipt of certain antitrust and regulatory clearances;

• the procedures set out in the SE Employees Directive as implemented in all relevant countries with respect to the involvement of the employees in the Enlarged Group having been complied with;

• the receipt by each of PartyGaming and bwin of an Expert's Report prepared by two Independent Experts confirming the fairness of the Exchange Ratio; and

• admission of the New PartyGaming Shares (and re-admission of the existing PartyGaming Shares) to the Official List of the UKLA and to trading on the London Stock Exchange's main market for listed securities.

A summary of the expected process for completing the Proposed Merger can be found in Appendix II.

The Conditions of the Proposed Merger are set out in full in Appendix III of this announcement.

The Proposed Merger will not lead to a mandatory takeover offer (Pflichtangebot) under the Austrian Takeover Law (Übernahmegesetz).

10. Further documentation

Irrevocable undertakings and Share sales

Certain PartyGaming Shareholders and bwin Shareholders have given irrevocable undertakings to vote in favour of the Proposed Merger. Details of these irrevocable undertakings are in Appendix I.

The Founder Shareholders have not given any commitment regarding their current shareholdings in PartyGaming and bwin (other than as to voting) and are free to increase or reduce their current holdings should they wish to do so. If however, any decision is taken to sell any or all of their shares, they commit to give notice to each other, PartyGaming, bwin and other Founder Shareholders in advance of any such disposal. Whilst under no obligation to do so, prior to Completion, NMGH is able to sell up to 600,000 bwin Shares if Manfred Bodner so wishes. If Manfred Bodner decides to sell any bwin Shares, he commits to give notice to the Founder Shareholders, PartyGaming and bwin. The irrevocable undertakings described above will apply to the Shares held by the relevant Founder Shareholders from time to time.

Merger Implementation Agreement

PartyGaming and bwin have entered into a Merger Implementation Agreement, which sets out their respective obligations governing implementation of the Proposed Merger. A summary of the key elements of this agreement is set out in Appendix III.

Adoption of new articles of association and RPA

On Completion, the Enlarged Group will adopt new articles of association to reflect the fact that it has taken the form of an SE. In addition, it is proposed that PartyGaming's new articles of association will provide that the board of directors of the Enlarged Group may require shareholders holding more than 5% of the shares of the Enlarged Group to cooperate with, and take certain actions (including the disposal of some or all of the shareholder's shares) that may be required by, any gaming regulatory authority in connection with business opportunities identified by the Enlarged Group the ("Regulatory Article"). This will facilitate and enable the Enlarged Group to pursue its business strategy and to exploit new and expanding markets in the future.

PartyGaming, bwin, their respective Founder Shareholders and certain of their directors have entered into the RPA, which will become effective upon approval by PartyGaming Shareholders as a related-party transaction. The RPA governs how its parties will deal with regulatory matters, which for shareholders generally will be dealt with in the Regulatory Article. The Regulatory Article will also provide that, for as long as PartyGaming Founder Shareholders own shares of the Enlarged Group, the Regulatory Article cannot be amended without the consent of the persons who are parties to any regulatory process agreements.

New Relationship Agreements

PartyGaming has entered into new relationship agreements with the PartyGaming Founder Shareholders and the bwin Founder Shareholders. The PartyGaming Relationship Agreement, which will become effective conditional upon approval by the PartyGaming Shareholders, and the bwin Relationship Agreement, which will be conditional upon Completion, will regulate the relationship between the Enlarged Group and the Founder Shareholders. Among other things, each Relationship Agreement provides that, for so long as the relevant Founder Shareholders between them own or control at least 5% of the shares of the Enlarged Group, they will collectively have the right to nominate one non-executive director for appointment to the board of the Enlarged Group and the benefit of certain other protections contained in the Relationship Agreement.

The Relationship Agreementsalso grant the relevantFounder Shareholders the ability to transfer their director nomination right to a transferee of 6% of the Enlarged Group under certain circumstances. Following the transfer of such right the relevant Founder Shareholders shall cease to have the right to nominate a non-executive director to the board of the Enlarged Group. The transferee of such nomination right may not transfer such right.

11. General

The PartyGaming Board and bwin Board each intends to unanimously recommend to their respective shareholders to vote in favour of the Proposed Merger, as they intend to do so in respect of their own holdings.

A copy of this announcement, as well as further information related to both PartyGaming and bwin, is available on PartyGaming's website at www.partygaming.com. From the time of this announcement and throughout the period until Completion, or until such time as an announcement is made that the implementation of the Proposed Merger has been terminated, PartyGaming will disclose all stock exchange announcements made by bwin through PartyGaming's normal channels and on PartyGaming's website. Going forward the Enlarged Group will continue to comply with all requirements of the Disclosure and Transparency Rules with respect to the disclosure of price sensitive information.

Enquiries:

 

PartyGaming	bwin
Peter Reynolds, Director of Corporate Affairs	Konrad Sveceny, Head of Investor Relations
John Shepherd, Director of Corporate Communications	Katharina Riedl, Head of Corporate Communications
Tel: +44 (0) 20 7337 0100	Tel: 43 (0) 50 858 200 17
Deutsche Bank (Financial Adviser and Corporate Broker to PartyGaming)	McQueen (Financial Adviser to bwin)
Alastair Mathieson, James Davies	George Fleet, Simon Croft-Baker
Charles Wilkinson, Mumtaz Naseem (Corporate Broking)
Tel: +44 (0) 20 7545 8000	Tel: +44 (0) 20 7484 8800

 

Further information on PartyGaming and bwin

About PartyGaming Plc

PartyGaming is a constituent of the FTSE 250. In the year ended 31 December 2009, PartyGaming's Continuing operations generated €310m, Clean EBITDA of €94m, profit before tax of €57 million and gross assets of €434 million. PartyGaming's principal brands are www.PartyPoker.com, one of the world's largest online poker rooms, www.PartyCasino.com, the world's largest online casino, www.PartyBingo.com, www.PartyGammon.com, www.PartyBets.com, www.InterTrader.com, www.FoxyBingo.com, www.GetMinted.com, www.Gamebookers.com and www.WorldPokerTour.com. None of the Group's sites accept real money customers located in the US. PartyGaming is regulated and licensed by the Governments of Gibraltar, Italy and France and by the Alderney Gambling Control Commission and it is also certified as a responsible gaming operator by GamCare, the leading UK authority on the provision of advice, practical help, support and counselling in addressing the social impact of gambling. PartyGaming's shares are also a constituent member of the FTSE4Good Index Series, which enables investors to identify companies that meet globally recognised corporate responsibility standards. For more information, please visit www.partygaming.com

About bwin Interactive Entertainment AG

bwin has over 20 million registered customers in more than 25 core markets. On a number of different platforms, the Group offers sports betting, poker, casino games, soft and skill games, as well as audio and video streams of top sporting events such as the German Soccer League. The holding company bwin Interactive Entertainment AG is listed in the ATX on the Vienna Stock Exchange (ID code BWIN, Reuters ID code BWIN.VI), and as the parent company provides various services such as software development, marketing, communications, human resources and finance for its subsidiaries and associated companies. In the year ended 31 December 2009, bwin's continuing operations generated net revenues of €373 million, EBITDA €102 million, profit before tax of €50 million and gross assets of €493 million. None of the Group's sites accept real money customers located in the US. The operational business of the bwin Group is carried out by subsidiaries and associated companies on the basis of licences (e.g. France, Germany, Italy and Gibraltar). Full details about the Company can be found on its investor relations website at www.bwin.org

 

APPENDIX I: Details of irrevocable undertakings

The following PartyGaming Shareholders have given irrevocable undertakings over any PartyGaming Shares they own at the time of the PartyGaming EGM to vote in favour of the Proposed Merger. Based on their current holdings, this represents:

Shareholder	Number of existing issued PartyGaming Shares to which the undertaking relates	Percentage of existing issued share capital to which the undertaking relates
Emerald Bay Limited	58,498,667	14.2%
Stinson Ridge Limited	58,498,666	14.2%
Jim Ryan	425,000	0.1%
Martin Weigold	68,444	-
Total	117,490,777	28.5%

 

The following bwin Shareholders have given irrevocable undertakings over any bwin Shares they own at the time of the bwin EGM to vote in favour of the Proposed Merger. Based on their current holdings, this represents:

Shareholders	Number of existing issued bwin Shares to which the undertaking relates		Percentage of existing issued share capital to which the undertaking relates (a)
New Media and Gaming Holding Limited	2,011,190		5.6%
Androsch Privatstiftung	2,853,600		7.9%
Dr. Hannes Androsch		306,710	0.9%
Total	5,171,500		14.4%

The PartyGaming and bwin Shareholders giving the irrevocable undertakings detailed above undertake not to dispose of the shares held by them in the relevant company prior to completion of the Proposed Merger, subject to certain exceptions. Emerald Bay Limited, Stinson Ridge Limited and Androsch Privatstiftung may sell shares they hold if such sale: (i) takes place on the relevant Stock Exchange; or (ii) is off-market but to an unconnected party (and if a disposal of 4% or more of the relevant company's issued share capital, the purchaser enters into a substantially equivalent irrevocable undertaking); or (iii) is to a connected person who has entered into a substantially equivalent irrevocable undertaking. Further, NMGH is permitted to sell up to 600,000 bwin Shares if Manfred Bodner so wishes prior to Completion.

The irrevocable undertakings will terminate in a number of specified circumstances.

APPENDIX II: Summary of the expected process for completing the Proposed Merger

 

Overview

A Societas Europaea, or SE, is a company formed under European law which can be registered in any EU member state. An SE can be created in four different ways: merger, formation of a holding company, formation of a joint subsidiary or conversion of a public limited company previously formed under national law. Formation by merger is available only to public limited companies from different EU member states, such as PartyGaming and bwin, and is the method intended to be used in the Proposed Merger.

Merger process

The process of forming an SE by merger involves the following key steps:

·; Preparation and approval of draft terms of the Proposed Merger

The PartyGaming Board and the bwin Board must draw up draft terms of merger setting out certain information specified in the relevant legislation. These must be examined by Independent Experts who will prepare a report thereon for the PartyGaming Shareholders and the bwin Shareholders respectively, determining whether the Exchange Ratio is fair and reasonable.

·; Shareholder approval

The Proposed Merger will be subject to the approval of both the PartyGaming Shareholders and the bwin Shareholders. In addition, PartyGaming Shareholders will be required to approve certain other matters in connection with PartyGaming taking the form of an SE, including the adoption of new constitutional documents.

·; Sanction of the Proposed Merger by competent authorities in Gibraltar and Austria

Following the approval of the Proposed Merger by the PartyGaming Shareholders and the bwin Shareholders, the Proposed Merger must also be sanctioned by the competent authorities in Gibraltar and Austria.

·; Employee consultation

Prior to Completion of the Proposed Merger, arrangements must be made regarding employee involvement in the Enlarged Group.

·; Completion of the Proposed Merger

Once the steps described above have been completed and the other conditions as set out in Appendix III of this announcement have been satisfied, bwin's assets and liabilities will be transferred to PartyGaming, whereupon PartyGaming will take the form of an SE and bwin will be wound up without going into liquidation and will be de-listed from the Vienna Stock Exchange. bwin Shareholders will receive New PartyGaming Shares (in accordance with the Exchange Ratio) which will be admitted to the Official List of the UKLA and to trading on the London Stock Exchange's main market for listed securities.

 

APPENDIX III: Conditions to the implementation of the Proposed Merger

Conditions and certain further terms of the Proposed Merger

Completion of the Proposed Merger will not take place unless all the conditions set out below have been satisfied (or, if capable of waiver, waived in writing) by 6.00 p.m. on the Longstop Date or such later date as PartyGaming and bwin may agree and (if required) the Court may approve.

1.1 The obligations of bwin to make available the bwin Merger Documentation to the bwin Shareholders and the obligations of PartyGaming to apply to the Court for leave to convene the PartyGaming Court Meeting and to post the PartyGaming Merger Circular to the PartyGaming Shareholders are subject to the following conditions:

(a) the approval by:

(i) the board of directors of PartyGaming of the draft Merger Plan and the report of the board of directors of PartyGaming thereon;

(ii) the management board of bwin of the draft Merger Plan and the report of the management board of bwin thereon;

(iii) the supervisory board of bwin of the draft Merger Plan and the reports of the management board and of the supervisory board of bwin thereon;

(b) the receipt by PartyGaming and bwin of the applicable Expert's Report; and

(c) the filing of the draft Merger Plan with the competent authorities in Gibraltar and Austria and the publication of all necessary advertisements in connection therewith.

1.2 The Proposed Merger is conditional on:

(a) the approval of the bwin EGM Resolutions by bwin Shareholders present and voting at the bwin EGM, either in person or by proxy, or at any adjournment of that meeting representing not less than 75 per cent. of the bwin Shares held by such bwin Shareholders who are so present or duly represented at the bwin EGM and voting;

(b) the approval of the Proposed Merger by a majority in number of the holders of PartyGaming Shares present and voting at the PartyGaming Court Meeting, either in person or by proxy, or at any adjournment of that meeting representing not less than 75 per cent. in value of the PartyGaming Shares held by such holders who are so present and voting;

(c) the PartyGaming EGM Resolutions being passed by the requisite majorities at the PartyGaming EGM or at any adjournment of that meeting;

(d) the Austrian Commercial Register having issued the Austrian Pre-Merger Legality Certificate;

(e) the procedures set out in the SE Employees Directive as implemented in all relevant countries with respect to the involvement of the employees in the Enlarged Group having been complied with;

(f) the Proposed Merger being sanctioned by the Court (with or without modifications and, if modified, on terms reasonably acceptable to PartyGaming and bwin);

(g) delivery to the Gibraltar Companies Registrar for registration of an office copy of the Court Order and registration of the Court Order by her;

(h) the Effective Date having occurred; and

(i) the UK Listing Authority having agreed to admit the New PartyGaming Shares and to re-admit the PartyGaming Shares to the Official List (premium listing) and the London Stock Exchange having agreed to admit the New PartyGaming Shares and to re-admit the PartyGaming Shares to trading on its main market for listed securities.

Application to the Court to sanction the Proposed Merger will not be made, or the parties will procure that any petition issued in respect of the sanction of the Proposed Merger will not be heard, unless the Conditions in paragraphs 1.2(a) to (e) above have been satisfied and the Conditions in paragraph 1.3 below have been satisfied or, if capable of waiver, waived in writing.

1.3 The Proposed Merger is also conditional on:

(a) no Third Party having intervened (as defined below) and there not continuing to be outstanding any statute, regulation or order of any Third Party in each case which is or is likely to be material in the context of the Proposed Merger which would or might reasonably be expected to:

(i) make the Proposed Merger or its implementation void, illegal or unenforceable in any jurisdiction, or otherwise directly or indirectly restrain, prevent, prohibit, restrict or delay the same or impose additional conditions or obligations with respect to the Proposed Merger, or otherwise impede, challenge or interfere with the Proposed Merger, or require amendment to the terms of the Proposed Merger;

(ii) require, prevent or delay the divestiture or alter the terms envisaged for any proposed divestiture by any member of PartyGaming's Group or by any member of bwin's Group of all or any portion of their respective businesses, assets or properties or limit the ability of any of them to conduct any of their respective businesses or to own or control any of their respective assets or properties or any part thereof;

(iii) require any member of PartyGaming's Group or of bwin's Group to acquire, or to offer to acquire, any shares or other securities (or the equivalent) in any member of either Group owned by any third party;

(iv) limit the ability of any member of PartyGaming's Group or of bwin's Group to conduct or integrate or coordinate its business, or any material part of it, with the businesses or any material part of the businesses of any other member of such Group;

(v) otherwise than in connection with the Proposed Merger, result in any member of PartyGaming's Group or bwin's Group ceasing to be able to carry on business under any name under which it presently does so; or

(vi) otherwise materially adversely affect any or all of the business, assets, profits, financial or trading position or prospects of any member of PartyGaming's Group or of bwin's Group,

and all applicable waiting and other time periods during which any Third Party could intervene under the laws of any relevant jurisdiction having expired, lapsed or been terminated;

(b) in so far as the Proposed Merger requires approval pursuant to the competition laws in any jurisdiction without which completion would be unlawful or otherwise prohibited or restricted, all Relevant Antitrust Authorities having either (i) declined jurisdiction over the Proposed Merger or (ii) having either granted clearance explicitly or, through the expiration of time periods available for their investigation, are deemed to have granted clearance either unconditionally or in terms (reasonably) satisfactory to the parties or (iii) until any applicable waiting periods in respect thereof have expired. In countries where competition law requires the notification of the Proposed Merger and where completion is unlawful or prohibited prior to notification of the Proposed Merger, completion of this Merger shall be conditional upon a (complete)notification being submitted to the Relevant Antitrust Authorities. If it becomes apparent that a Relevant Antitrust Authority will only adopt a clearance decision referred to in this paragraph above subject to certain conditions or obligations, such conditions and obligations shall only be offered upon prior mutual written consent of the parties; 

(c) all notifications and filings which are necessary or are reasonably considered appropriate by either PartyGaming or bwin having been made, all appropriate waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory or regulatory obligations in any relevant jurisdiction having been complied with in each case in connection with the Proposed Merger or the carrying on by any member of PartyGaming's Group or bwin's Group of its business;

(d) all Authorisations which are necessary or are reasonably considered necessary or appropriate by PartyGaming or bwin in any relevant jurisdiction for or in respect of the Proposed Merger or the carrying on by any member of PartyGaming's or bwin's Groups of its business having been obtained, in terms and in a form reasonably satisfactory to the parties, from all appropriate Third Parties or from any persons or bodies with whom any member of PartyGaming's Group or bwin's Group has entered into contractual arrangements (in each case where the absence of such Authorisation would have a material adverse effect on such Group taken as a whole) and all such Authorisations remaining in full force and effect and there being no notice or intimation of any intention to revoke, suspend, restrict, modify or not to renew any of the same, and in particular notice in writing having been received from each of the Relevant Authorities identified below, in terms reasonably satisfactory to the parties, and either unconditionally or subject to conditions reasonably satisfactory to the parties, of its approval of the Proposed Merger:

(i) the Gibraltar Licensing Authority;

(ii) the Alderney Gambling Control Commission; and

(iii) if required as a consequence of any decision taken by the parties in respect of the structure of the Enlarged Group, the Italian State Monopolies Autonomous Administration (l'Amministrazione autonoma dei monopoli di Stato - AAMS).

The Conditions in paragraphs 1.1 and 1.2(a) to 1.2(h) above may not be waived. The Conditions in paragraphs 1.2(i) and 1.3 may only be waived with the written consent of both PartyGaming and bwin. Neither party shall be under any obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of the Conditions in paragraphs 1.2(i) and 1.3 by a date earlier than the latest date (if any) specified above for the fulfilment of that Condition, notwithstanding that the other conditions of the offer may at such earlier date have been waived or fulfilled and that there are, at such earlier date, no circumstances indicating that any condition may not be capable of fulfilment.

Certain further terms of the Proposed Merger

The New PartyGaming Shares will be issued fully paid and free from all liens, equitable interests, charges, encumbrances and other third-party rights of any nature whatsoever and together with all rights attaching to them, including the right to receive and retain all dividends and distributions (if any) declared, made or payable after the Effective Date.

The Proposed Merger will be on the terms and will be subject, inter alia, to the Conditions which are set out in paragraph 1 above and those terms which will be set out in the formal Merger Documentation and such further terms as may be required to comply with applicable law and the Listing Rules of the UK Listing Authority.

For the purpose of this Appendix:

"Third Party"means any central bank, government, government department or governmental, quasi governmental, supranational, statutory, regulatory or investigative body, authority (including any national anti trust or merger control authority), court, trade agency, association, institution or professional or environmental body or any other person or body whatsoever in any relevant jurisdiction;

a Third Party shall be regarded as having "intervened" if it has decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or made, proposed or enacted any statute, regulation, decision or order or taken any measures or other steps or required any action to be taken or information to be provided or otherwise having done anything and intervene shall be construed accordingly; and

"Authorisations" means authorisations, orders, grants, recognitions, determinations, certificates, confirmations, consents, licences, clearances, provisions and approvals.

APPENDIX IV: Summary of the Merger Implementation Agreement

Introduction

bwin and PartyGaming have entered into the Merger Implementation Agreement which contains mutual undertakings and assurances in relation to the parties' commitment to implement the Proposed Merger and related matters, including provisions governing the conduct of business of bwin and PartyGaming and other transaction protection measures.

Recommendation

Each of PartyGaming and bwin agrees that the circular and other relevant merger documentation will incorporate an unqualified recommendation from the PartyGaming Directors or the bwin Directors, as appropriate, to vote in favour of the resolutions to be proposed at the PartyGaming EGM and PartyGaming Court Meeting, and the bwin EGM, as applicable (as they shall do in respect of their own holdings of PartyGaming Shares or bwin Shares, as applicable), and that the PartyGaming Directors or the bwin Directors, as appropriate, will not at any time withdraw, modify, qualify or amend their recommendation (subject to their fiduciary duties and except to the extent that either of the Independent Experts refuses to publish its Expert's Report or publishes its Experts Report and concludes therein that the Exchange Ratio is not fair and reasonable or that the Cash Compensation or the methodology used to arrive at the Exchange Ratio is inadequate).

Matching rights and non-solicitation

Each of PartyGaming and bwin agrees that it shall not directly or indirectly solicit, initiate or otherwise seek to procure any competing proposal, and that it shall not disclose information to any third party in connection with a possible competing proposal other than as required by applicable law or regulation, or the company's constitutional documents or where necessary to ensure compliance with the fiduciary duties of its Directors.

The Merger Implementation Agreement also contains a right for each of bwin and PartyGaming to match any Competing Proposal made in relation to the other party.

Conduct pending Completion

Pending the earlier of the Effective Date and the termination of the Merger Implementation Agreement each of PartyGaming and bwin has agreed to carry on its businesses in the ordinary course and not to enter into transactions or arrangements outside the ordinary course of business and not to take certain other specified actions.

Break fees

PartyGaming has undertaken to pay to bwin the sum of £10.6 million and bwin has undertaken to PartyGaming the sum of €12.7 million in certain circumstances, including if:

(a) the PartyGaming Board or bwin Board, as appropriate, fails to recommend the Proposed Merger, or withdraws, qualifies or modifies the terms of its recommendation, or resolves to recommend a third party competing proposal, and each Independent Expert has published its Expert's Report and has concluded therein that the Exchange Ratio is fair and reasonable and the Cash Compensation and the methodology used to arrive at the Exchange Ratio are adequate; and

(b) a Competing Proposal in relation to PartyGaming or bwin, as appropriate, is announced, and such Competing Proposal or any other Competing Proposal subsequently becomes effective, becomes or is declared unconditional in all respects or is otherwise completed.

Termination

The Proposed Merger Implementation Agreement may be terminated as follows:

(a) as agreed in writing between PartyGaming and bwin at any time prior to the Effective Date;

(b) if the Proposed Merger is not sanctioned by the Court or approved by PartyGaming Shareholders at the PartyGaming Court Meetings or the PartyGaming EGM Resolutions are not approved at the PartyGaming EGM;

(c) if the bwin EGM Resolutions are not approved at the bwin EGM;

(d) by either party if at any time prior to satisfaction or waiver (as the case may be) of the Conditions there is a Competing Proposal which subsequently becomes effective, becomes or is declared unconditional in all respects or is otherwise completed resulting in more than 50 per cent. of the issued share capital of the other party becoming controlled by a third party which is not acting in concert with the party terminating the Merger Implementation Agreement;

(e) by either party if any Relevant Antitrust Authority decides has concerns with the Proposed Merger and opens an in-depth second stage of the Relevant Antitrust Authority's review process;

(f) by either party if at any time prior to satisfaction or waiver (as the case may be) of the Conditions the other party commits a material breach of the Merger Implementation Agreement;

(g) by either party if at any time on or after the earlier of 1 November 2010 and publication of the Expert's Reports but prior to the satisfaction or waiver (as the case may be) of the Conditions the price of both parties' shares is such that the ratio of the market capitalisation of one party to the market capitalisation of the other party is 70:30 or greater;

(h) if the Effective Date has not occurred by the Longstop Date or such later date (if any) as the parties may agree and (if required) the Court may approve; or

(i) in circumstances where either Independent Expert refuses to publish its Expert's Report or otherwise notifies the relevant party that it will not be rendering its Expert's Report, or either Independent Expert publishes its Expert's Report and concludes therein that the Exchange Ratio is not fair and reasonable or the Cash Compensation or the methodology used to arrive at the Exchange Ratio is inadequate.

APPENDIX V: SEGMENT INFORMATION

 

1. Net Gaming Revenue[6]

In €millions unless otherwise stated	PartyGaming	bwin	Combined pre-synergies
By Product	309	373	682
Poker	137	89	226
Sports	13	195	208
Casino	136	64	200
Games/Bingo	23	25	48
By Country	309	373	682
Germany	57	114	171
Italy	6	35	41
UK	48	3	51
Greece	4	42	46
Canada	42	2	44
France	11	26	37
Other	141	151	292

 

APPENDIX VI: Exchange Ratio

 

	PartyGaming	bwin
Relative ownership	48.36%	51.64%
Issued shares	412,794,866	35,956,688
Treasury shares	--	(153,586)
Nil paid shares	(4,365,185)	--
Vested but unexercised nil paid shares	1,535,919	--
Total adjusted number of shares	409,965,600	35,803,102
Exchange Ratio	12.23

 

APPENDIX VII: DEFINITIONS

 

In this announcement the following definitions apply unless the context requires otherwise:

 

Acting in concert	means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, either directly or indirectly, to obtain or consolidate control of a company. For the purposes of this definition, the following (among others) will be presumed to be acting in concert with other persons in the same category unless the contrary is established: (i) a company, its holding company, subsidiaries and fellow subsidiaries, and their associated companies, and companies of which such companies are associated companies, all with each other (for this purpose ownership or control of 20% or more of the equity share capital of the company is regarded as the test of whether a company is an associated company), and (ii) a company with any of its directors (together with their close relatives and related trusts);
Antitrust Clearances	all consents, clearances, notifications, permissions and waivers as may be necessary or desirable for the implementation of the Merger, and all filings and waiting periods as may be necessary or desirable, from or under the laws, regulations or practices applied by any Relevant Antitrust Authority in connection with the implementation of the Merger (including any such consents, clearances, permissions, waivers and all filings and waiting periods as are set out in the Conditions)
Austrian Pre-Merger Legality Certificate	certificate conclusively attesting to the completion of the pre-Merger acts and formalities in Austria
Austrian Takeover Law (Übernahmegesetz)	the law governing public takeover and merger bids in Austria
B2B	Business-to-business
B2C	Business-to-consumer
B2G	Business-to-government
bwin	bwin Interactive Entertainment AG, a company registered in Austria and having its registered office at Börsegasse 11, 1010 Vienna, Austria
bwin Board	the Supervisory and Executive boards of directors for the time being of bwin
bwin Directors	the Directors of bwin from time to time
bwin EGM	means the extraordinary general meeting of bwin Shareholders to consider and, if thought fit, approve, amongst other things, the bwin EGM Resolutions, and any adjournment thereof
bwin EGM Resolutions	the resolutions to approve the Proposed Merger and matters related to the Proposed Merger to be proposed at the bwin EGM
bwin Founder Shareholders	Norbert Teufelberger, Manfred Bodner, New Media and Gaming Holding Limited and Androsch Privatstiftung
bwin Merger Documentation	the documents to be made available to bwin Shareholders and others (or otherwise published in accordance with the requirements of bwin's articles of association and any other applicable law or regulation) by bwin containing, amongst other things, details of the Proposed Merger, certain information about PartyGaming and bwin and the notice of the bwin EGM and, where the context so requires, includes any form of proxy, notice, court document, meeting advertisement or other document reasonably required in connection with the Proposed Merger;
bwin Relationship Agreement	the relationship agreement dated 29 July 2010 between PartyGaming and the bwin Founder Shareholders governing the relationship between the parties following Completion
bwin Shareholders	holders of bwin Shares
bwin Share Plans	the employee stock option plan established by bwin dated February 2000 and amended in May 2005, and the arrangements set out in the bwin Performance Options, and as to be amended further in accordance with the provisions of the Merger Implementation Agreement
bwin Shares	no par value shares in the capital of bwin
Cash Compensation	the cash compensation (Barabfindung) payable in relation to the Merger to the Dissenting Shareholders, and to be described in the bwin Merger Documentation, in accordance with article 22 of the SE Regulation
Change of Control	the acquisition of an interest or interests in shares carrying in aggregate 30% or more of the voting rights of a company, irrespective of whether such interest or interests give de facto control;
Combined Code	The Combined Code on Corporate Governance published by the Financial Reporting Council
Competing bwin Proposal	means any invitation to treat, offer or possible offer, merger or business combination, liquidation or other transaction which is, in any such case, announced or entered into by a third party which is not acting in concert with PartyGaming, including any revisions thereof, and: (a) the purpose of which is to enable that third party (or any other person) to acquire, directly or indirectly all or a material proportion of: (i) the issued and to be issued share capital of bwin; or (ii) bwin's undertaking, assets and/or business; or (b) in relation to a transaction which would result in a Change of Control of bwin or would otherwise be inconsistent with the consummation of the Proposed Merger,in each case howsoever it is proposed that such proposal be implemented (and whether or not subject to any pre- conditions or being legally binding)
Competing PartyGaming Proposal	means any invitation to treat, offer or possible offer, scheme of arrangement, merger or business combination, liquidation or other transaction which is, in any such case, announced or entered into by a third party which is not acting in concert with bwin, including any revisions thereof, and: (a) the purpose of which is to enable that third party (or any other person) to acquire, directly or indirectly all or a material proportion of: (i) the issued and to be issued share capital of PartyGaming; or (ii) PartyGaming's undertaking, assets and/or business; or (b) in relation to a transaction which would result in a Change of Control of PartyGaming or would otherwise be inconsistent with the consummation of the Proposed Merger in each case howsoever it is proposed that such proposal be implemented (and whether or not subject to any pre-conditions or being legally binding);
Competing Proposal	means a Competing PartyGaming Proposal or a Competing bwin Proposal or both, as the context requires
Completion	the registration of the Proposed Merger in Gibraltar and the admission of the New PartyGaming Shares (and the re-admission of the existing PartyGaming Shares) to the Official List of the UKLA and to trading on the London Stock Exchange's main market for listed securities
Conditions	the terms and conditions set out in Appendix III, which shall be incorporated into the Merger documentation
Court	the Supreme Court of Gibraltar
Deutsche Bank Directors	Deutsche Bank AG, London Branch the PartyGaming Directors or the bwin Directors or both of them as the context requires
Disclosure and Transparency Rules	the disclosure and transparency rules made by the FSA under Part VI of the FSMA
Dissenting Shareholders	those bwin Shareholders who: (i) vote against the Merger at the bwin EGM, (ii) object to the approval of the Merger at the bwin EGM, and have such objection recorded in the minutes of the bwin EGM, and (iii) request to receive Cash Compensation or to have the Exchange Ratio reviewed by the Austrian Court within one month after the bwin EGM
EBITDA	earnings before interest, tax, depreciation and amortisation. references to bwin's EBITDA as stated in this document excludes expenses for share-based remuneration in accordance with IFRS 2 and related one-off expenses references to PartyGaming's EBITDA as stated in this document excludes provisions for costs associated with the Group's Non-Prosecution Agreement, impairment losses, reorganisation costs and non-cash charges relating to share-based payments
Effective Date	the date on which the Court Order comes into full effect without being subject to any conditions, provided that such date shall be a Trading Day in London and Vienna;
Enlarged Group	with effect from Completion, the combined PartyGaming and bwin
Exchange Ratio	number of New PartyGaming Shares to be issued in consideration for each bwin share
Expert's Report	report as to whether the Exchange Ratio is fair and reasonable and the adequacy of the methodology used to arrive at the Exchange Ratio
Founder Shareholders	the PartyGaming Founder Shareholders or the bwin Founder Shareholders or all of them, as the context requires
FSA	the UK Financial Services Authority
FSMA	the Financial Services and Markets Act 2000
Gibraltar Companies Registrar	Registrar of Companies, Gibraltar, appointed from time to time pursuant to section 343 of the Gibraltar Companies Act as well as any Assistant Registrar appointed pursuant to such section
Gross Gaming Yield	total stakes received less winnings paid out
Group	that person and any companies which are holding companies of it or subsidiary undertakings of it or of any such holding company
Independent Experts	expert acting on behalf of each of PartyGaming and bwin but independent of both of them, to examine the fairness of the Exchange Ratio
Listing Rules	the listing rules made by the FSA under Part VI of the FSMA
London Stock Exchange	London Stock Exchange plc, together with any successors thereto
Longstop Date	being 365 days from the date of this announcement
McQueen	McQueen Limited
Merger Implementation Agreement	the agreement dated 29 July 2010 between PartyGaming and bwin setting out the terms and conditions of, and the arrangements for the implementation of, the Proposed Merger
Merger Plan	the terms of merger to include the particulars specified by the SE Regulation and such other particulars as PartyGaming and bwin may agree
New PartyGaming Shares	the new PartyGaming Shares to be issued and admitted to the Official List of the UKLA and to trading on the London Stock Exchange's main market for listed securities pursuant to the Proposed Merger
NMGH	New Media and Gaming Holdings Limited, the company holding bwin Shares on behalf of Norbert Teufelberger and Manfred Bodner
PartyGaming	PartyGaming Plc, a company registered in Gibraltar and having its registered office at 711 Europort, Gibraltar
PartyGaming Board	the board of directors for the time being of PartyGaming
PartyGaming Court Meeting	the meeting of the holders of the PartyGaming Shares in issue at the Voting Record Time convened by order of the Court pursuant to section 205 of the Gibraltar Companies Act, to consider and, if thought fit, approve the Proposed Merger (with or without amendment), and any adjournment thereof
PartyGaming Depositary Interests	the dematerialised depositary interests in respect of PartyGaming Shares issued or to be issued by the Depositary
PartyGaming Directors PartyGaming EGM	the directors of PartyGaming from time to time the extraordinary general meeting of PartyGaming Shareholders to consider and, if thought fit, approve, amongst other things, the PartyGaming EGM Resolutions, and any adjournment thereof
PartyGaming EGM Resolutions	the resolutions to approve the Merger and matters related to the Merger to be proposed at the PartyGaming EGM
PartyGaming Founder Shareholders	Ruth Parasol DeLeon, James Russell DeLeon, Stinson Ridge Limited and Emerald Bay Limited
PartyGaming Merger Circular	the document to be despatched to PartyGaming Shareholders and others (or otherwise published in accordance with the requirements of the Court, the Articles, and any other applicable law or regulation) by PartyGaming containing, amongst other things, details of the Proposed Merger, certain information about PartyGaming and bwin and the notices of the PartyGaming Meetings and, where the context so admits, includes any form of proxy, notice, court document, meeting advertisement or other document reasonably required in connection with the Proposed Merger
PartyGaming Relationship Agreement	the relationship agreement dated 29 July 2010 between PartyGaming and the PartyGaming Founder Shareholders governing the relationship between the parties following approval of the PartyGaming EGM Resolutions at the PartyGaming EGM
PartyGaming Shareholders	holders of PartyGaming Shares and PartyGaming Depositary Interests
PartyGaming Share Plans	the PartyGaming Plc Share Option Plan dated 28 April 2005, PartyGaming Executive Share Option Plan dated 28 April 2005 (as amended on 21 March 2007), PartyGaming Plc All Employee Option Plan dated 21 March 2007 and PartyGaming Plc Performance Share Plan dated 21 March 2007
PartyGaming Shares	ordinary shares of 0.015 pence each in the capital of PartyGaming
Proposed Merger	the merger proposed to be conducted pursuant to the Regulation on the Statute for a European Company (2157/2001) in accordance with which bwin would transfer all its assets and liabilities to PartyGaming, whereupon PartyGaming would take the form of a Societas Europaea and bwin would be dissolved without going into liquidation then delisted from the Vienna Stock Exchange
Relationship Agreements	the PartyGaming Relationship Agreement and the bwin Relationship Agreement, and "Relationship Agreement" means either of them
Relevant Antitrust Authority	any national or supranational antitrust or merger control authority that is competent to review the Merger or its implementation
Restricted Jurisdiction	any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Proposed Merger is sent or made available to bwin Shareholders in such jurisdiction
RPA	the regulatory process agreement dated 29 July 2010 between, amongst others, the Founder Shareholders, bwin and PartyGaming to facilitate the exploitation of certain new business opportunities for PartyGaming
Shares	the PartyGaming Shares or the bwin Shares or all of them, as the context requires
SE/ Societas Europaea / European Company	a company formed pursuant to the Regulation on the Statute for a European Company (2157/2001)
SE Employees Directive	Council Directive 2001/86/EC supplementing the statute for a European company with regard to the involvement of employees
SNB	a special negotiating body, as referred to in the Regulation on the Statute for a European Company (2157/2001)
Trading Day	a day on which the London Stock Exchange and the Vienna Stock exchange are scheduled to be open in their regular trading session
UK CGC	UK Corporate Governance Code
UKLA	the FSA acting in its capacity as the competent authority for the purposes of Part VI of the FSMA and in the exercise of its functions in respect of the admission to the Official List otherwise in accordance with Part VI of that Act, including where the context so permits any committee, employee, officer or servant to whom any function of the UK Listing Authority may for the time being be delegated
US or United States	the United States of America, its territories and possessions, any State of the United States and the District of Columbia
Vienna Stock Exchange	means Wiener Börse AG

 

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This information is provided by RNS

The company news service from the London Stock Exchange