Ladbrokes - 888 Deal Confirmed

LADBROKES - 888 DEAL CONFIRMED

20th December, 2010 at 06:33:13
Source: http://www.azonlinecasinos.com

888 shares surge 24 percent, but there are still concerns over 888's US vulnerability

The industry remained abuzz with speculation on the weekend news that Ladbrokes was making a 240 million bid for online gambling software developer 888 (see previous report).

At 70p a share, the reported deal represents a premium of some 40 percent, Reuters reported.

Both companies confirmed that they were in negotiations as the new week commenced, with 888's share price soaring by 24% on the news that it may be acquired by the major UK online and land gambling group.

It provided 888 investors, who have seen their shares lose around two-thirds in value since January 2010, with some welcome and positive momentum, although the market quieted down to a rise of approximately 18% later Monday.

Under the leadership of former CEO Chris Bell, Ladbrokes made an acquisition run on 888 four years ago (see previous reports) but the deal fell through over concerns regarding 888's vulnerability to US legal problems connected with its pre-UIGEA presence in that country.

Unlike Party Gaming and Sportingbet, 888 has not negotiated a probably expensive settlement with US authorities.

With a new CEO at the Ladbrokes helm in the form of Richard Glynn, analysts are predicting that the present negotiations could be the new incumbent's first big deal.

Collins Stewart analyst Simon Davies said: "We believe a 70-pence offer should be a slam dunk for investors, but see significant regulatory risk to a successful transaction given that 888 has not procured a non-prosecution agreement with the US Department of Justice, which represents a potential poison pill."

Morgan Stanley analysts said the deal could be a strategic and financial winner, matching Ladbrokes' strong sports betting book with 888's internet casino offering to create a combined online gambling business with annual revenue of around 350 million and earnings of 85 million. They opined that potential yearly savings for the companies could be as high aa 25 million in technology, marketing and overhead costs.

Ladbrokes Casino already enjoys success in the UK market and uses the market-leading Microgaming casino software. 888's casino uses it's own proprietary Random Logic software and it is not clear yet whether one will migrate platform.

Related News Tags: , , , ,



« News index »



MPN FLAGS MALTA TOURNAMENT

29th March, 2017 at 19:48:16
Euro 150,000 guaranteed prize pool.

MICROGAMING PLAYING IT FORWARD AGAIN

29th March, 2017 at 15:16:22
Charity tournament benefits numerous charities across the globe.

SPORTECH FULL YEAR 2016 RESULTS

29th March, 2017 at 15:16:22
Results fail to impress but transformational period positions company for growth, Board believes.

NEW TELEVISION ADVERT FROM ONLINE CASINO

28th March, 2017 at 19:47:54
PlayOJO.com begins major marketing push in UK.

KOTIKASINO LAUNCH ON GLOBAL GAMING PLATFORM

28th March, 2017 at 11:21:29
First operator live on upgraded proprietary platform.