|Ladbrokes, the UK's second-largest bookmaker, is in talks to buy the online poker and casino group 888 Holdings in a deal that could potentially be worth £470 million.|
Executives of the betting shop group flew to Israel over the weekend to discuss a takeover deal with 888 founders and controlling shareholders Avi and Aharon Shaked. The Shaked brothers together control 51% of the company after floating it on the London stock exchange last year and each selling shares worth £52m.
The discussions are believed to have been brokered by 888's outgoing chief executive, John Anderson, who is also a former Ladbrokes director. Ladbrokes issued a statement yesterday confirming it was “in the early stages of reviewing a possible transaction involving 888. No decision has been made.” Reports over the weekend suggested 888 could fetch as much as £470m.
Ladbrokes chief executive Chris Bell is understood to have met Mr Anderson and the Shaked brothers in Israel, although Ladbrokes has declined to comment on the matter. Bell had previously stated his commitment to expanding in Europe as well as building on Ladbrokes’ fast-growing internet operations, which last year accounted for 15 percent of operating profit.
Five years ago Ladbrokes was among several UK bookmakers to negotiate major tax concessions in exchange for a commitment to bring offshore telephone and internet sports betting back to the UK. Ladbrokes gaming operations, however, remained in Gibraltar and have been operating from the same office building as both 888 and PartyGaming.
The news will be a setback to rival online operator PartyGaming, who is also believed to be among 888's suitors, together with Las Vegas casino groups MGM and Harrah’s Entertainment. PartyGaming is now understood to be exploring a possible takeover of Austrian sports betting group Bwin.
Shares in 888 jumped 9.25p to 119.75p in early trading this morning, an increase of over 8 percent. Ladbrokes were 2.75p higher at 412.75p.