Austrian gaming operator Bwin plays down PartyGaming merger discussions

AUSTRIAN online gaming firm Bwin Interactive Entertainment has quashed talk of a £2bn tie-up with rival PartyGaming, but said prospects for industry mergers were rising.

Bwin said it was not in advanced merger talks with the UK firm or any other, although it did not rule out involvement in future deals.

PartyGaming is said to have been in “on-off” talks with the Vienna-based firm since the summer about a possible “merger of equals”.

A Bwin spokesman said it was “always talking to everyone” because it foresaw more consolidation.

But he added: "We are not in any advanced talks, including with PartyGaming.”

Shares in PartyGaming closed 0.25p up at 256.75p last night.

Analysts said the news of possible talks was unsurprising because online companies often talked to each other informally, although consolidation would gain momentum in 2010.

Broker Daniel Stewart said: “We would regard the rumoured Bwin/PartyGaming merger as exceptionally strategically compelling.”