It is no secret that realm of mergers and acquisitions is harsh and risky, associated with high expenses in case things go wrong…
A recent example is provided by 888 Holdings Public Limited Company (LON:888) which abandoned the bidding race for bwin.party in September last year, incurring some heavy exceptional costs associated with this move.
According to the annual report that 888 Holdings filed earlier today, the aborted acquisition has resulted in exceptional legal and professional costs of $17.5 million. Following the termination of the proposed deal, 888 received reimbursement income of $8.8 million from bwin.party, in accordance with its contractual agreement. Exceptional finance costs of $5.9 million were incurred in connection with the proposed acquisition too. The costs represent fair value movements on derivatives entered into to hedge the currency exposure associated with the transaction.
Exceptional costs associated with the proposed acquisition thus amounted to net $14.6 million.
Bwin.party was eventually acquired by GVC Holdings, with the deal completed in February this year.
For the full report from 888, click here.