Online Casino News - Update: Ladbrokes Takes over 888
20th of December 2010 - latestcasinobonuses.com
The deal confirmed
During the weekend, the online gambling industry news were filled with reports and speculations about the potential acquisition of online gambling software developer 888, by an industry giant Ladbrokes for GBP240 million. This time, the deal is confirmed; at 70p a share, it represents a premium of some 40 percent.
When the news about the negotiations between the two companies appeared, the price of 888's shares went up 24 percent, putting the company’s investors in a rather beneficial position, as prior to this they only saw their shares lose around two-thirds in value since January 2010.
Previously, four years ago, Ladbrokes made another attempt to acquire 888.com, but didn’t go through with it due to doubt that 888.com may prove vulnerable to US legal problems connected with its pre-UIGEA presence in the States. However, 888 hasn’t followed its competitors Party Gaming and Sportingbet, which have negotiated a settlement with US authorities.
The industry believes that this may be the first big deal for the new CEO at the Ladbrokes helm, Richard Glynn.
According to Collins Stewart analyst Simon Davies: "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."
It was assessed by Morgan Stanley analysts that this deal could prove to be a whole strategic and financial winner, as it will pair up Ladbrokes' strong sports betting book with 888's internet casino offering , and make an online gambling business whose estimated annual revenue is GBP350 million and earnings GBP85 million. In addition, the analysts stated that potential yearly savings for the companies could be as high aa GBP25 million in technology, marketing and overhead costs.
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