Home » Ladbrokes to Buy 888
Reports are coming through that Ladbrokes is all set to purchase 888 Holdings, with industry analysts saying the sale price might fetch up to $1 billion.
The two gambling firms have been involved in discussions for a month now, after Ladbrokes cut in front of PartyGaming to buy 888.
PartyGaming would still be interested in the Israeli-owned online gambling company, as both companies were hit hard by their decision to withdraw from the US market following the signing of the Unlawful Internet Gambling Enforcement Act.
It is understood, however, that 888 would prefer to be bought out by a traditional gambling company, rather than another online operator.
Its Casino Tropez been reported that Ladbrokes are offering between 140 and 145 pence a share, which is substantially higher than the current London Stock Exchange trading price (132p at time of writing). The sale, if successful, will earn 888 founders Aaron Shaked, Avi Shaked and Ron Ben-Yitzhak a small fortune, but the current owners of 888 Holdings had already seen their paper value plummet following their decision to exclude their US customers from their online casino and poker room. The US market accounted for up to half of their total customer base prior to the UIGEA.
888 had not been hit as hard as some other online operators however – PartyGaming lost around 75% of its value following the UIGEA and their subsequent decision to withdraw from the US market.
It is believed Ladbrokes are keen to acquire companies which hold brand appeal in Asia, which is widely regarded as the ‘new frontier’ for online gambling. 888 was initially branded for the Asian market, and it is believed they will be very competitive if and when the Asian market can be successfully cracked.
Ladbrokes heavy acquisition program won’t stop with 888 however – they are also reportedly interested in the leisure group Rank, following the sale of its Hard Rock café brand to the Seminole Tribe of Florida late last week.
2007 is predicted to be a lean year for the gambling industry worldwide, as the industry consolidates and recovers from the shock passing of the UIGEA. There are also no major sporting events to fill the bookies coffers. Smaller companies will be prime targets for takeover, and larger companies will be looking to build and shore up lagging share prices.