Ladbrokes set for 888 deal
A £490 million takeover of the online gambling company 888 by British bookmaker Ladbrokes could happen as early as next week.
The two firms have been involved in discussions for over a month, with PartyGaming also said to be in the frame, but it is believed that 888 would prefer to do a deal with a traditional gambling company over another online operator. PartyGaming have also been hit hard following the U.S clampdown on gambling.
The offer for 888 is said to be approximately between 140 pence and 145 pence a share and could net founding Israeli brothers Aaron and Avi Shaked and Shay and Ron Ben-Yitzhak millions.
The takeover will strengthen Ladbrokes muscle in the industry, improving its poker arm and its software capabilities, which it currently outsources. It is estimated cost savings could be as much as £20 million.
888 have not been hit as hard as other online operators following the new Unlawful Internet Gambling Act, since less than 50 percent of their revenues came from the U.S.
However, it appears as though Ladbrokes new acquisition strategy will not stop there. They are reported to be interested the leisure group, Rank, following the sale of its Hard Rock café brand to the Seminole Tribe of Florida yesterday. The sale makes Rank more affordable to the likes of Ladbrokes, with William Hill also said to be interested.
“Post the Hard Rock disposal, the probability of Rank being taken over goes up,” said Ivor Jones, analyst for Panmure Gordon.
Analysts agree that Ladbrokes and William Hill would be ideal buyers for the company because they have the potential to capitalise on the most benefits from any deal. However, the upcoming year is predicted to be a tough one for bookies as there are no major sporting events and the introduction of Augusts’ Amusement Machine Licence Duty hitting them with a large tax.
Editor, Jackpot.co.uk - 2006-12-08 11:48:05