BETTING firm Ladbrokes is in talks with 888 about a potential £240m takeover bid that sent shares in the online gambling group soaring.
Britain’s biggest bookmaker and 888 both confirmed weekend media speculation about the possible tie-up, saying they were in “very preliminary discussions”, although they declined to give details.
Ladbrokes, led by chief executive Richard Glynn, is thought to be keen on expanding its online operations, which while being successful are not believed to have grown as much as the bookmaker would have liked.
In August, 888 scrapped its dividend, preferring to keep cash after a weak economy and competition from soccer’s World Cup sapped appetite for poker and hit its first-half profit.
Shares in 888 rose 18 per cent to 58p yesterday, while Ladbrokes stock closed down 1.2 per cent to 126p.
Ladbrokes said: “There can be no certainty that these discussions will ultimately lead to an offer being made for 888. Further announcements will be made as appropriate.”
The move by Ladbrokes, which has 2,700 betting shops, would represent the latest move towards consolidation of the gaming industry after PartyGaming and bwin announced their merger in August.
Ladbrokes and 888 held talks four years ago but aborted them due to Ladbrokes’ concerns over the threat of possible retrospective legal action linked to 888’s activities in the US prior to the industry being outlawed in 2006.
Unlike rivals PartyGaming and Sportingbet, 888 has yet to strike a deal with US authorities to give it immunity from prosecution, which one broker said could scupper a bid.
GARRY Levin at Evolution Securities and Andrew Burnett at Panmure Gordon are joint brokers for 888 while Deutsche Bank and Greenhill advise Ladbrokes.
Garry Levin left his role as managing director in corporate finance at KBC Peel Hunt earlier this year to join rival Evolution Securities as head of its equity corporate finance division, a role he formally took up in April 2010.
Before working for KBC Peel Hunt, he was joint chief executive of broker Altium Capital between 2002 and 2007, having started his career as a solicitor.
Andrew Burnett, who also acts as a broker for 888, is an executive director at Panmure Gordon & Co. He was previously head of mergers & acquisitions at Empire Online, director of corporate finance at Numis Securities, research director at Merrill Lynch International, assistant director at Charterhouse Tilney and research analyst at County Natwest. He studied at the University of St Andrews.