Ladbrokes to take a punt on rival 888

BOOKMAKER Ladbrokes is preparing a £240m takeover approach for online casino and poker group 888.

The betting company is understood to be considering a 70p-a-share deal to buy the online firm, in the first major takeover by new chief executive Richard Glynn.

Glynn, who joined from spread-betting firm Sporting Index earlier this year, is understood to be keen to improve the bookmaker’s position in the online market.

Although Ladbrokes has strong market presence on the high street, the firm has lost out to rivals online in recent years, and a move for 888 could help to improve its position.

Yet the bid could face stiff competition from rivals, with online bookmaker Sportingbet thought to be among other big betting firms who could enter the running.

The deal is considerably lower than a £470m bid for 888 attempted by Ladbrokes’ former chief executive Chris Bell four years ago.

Concerns over a US Department of Justice crackdown on online betting led to board members refusing to back the plan.

American lawmakers introduced legislation in 2006 effectively banning online gambling, handing a raw deal to British betting companies operating in the US.

888 remains at risk to prosecution by the US, unlike rivals PartyGaming and Sportingbet, who have both struck deals with the DoJ.

Should lawmakers repeal the ban, betting firms could move to unlock the potentially lucrative US market.

Last year it was worth an estimated $5.4bn (£3.5bn), a figure that could rise to between $12bn and $16bn if the market is opened up.

Ladbrokes told City A.M. it was in preliminary discussions with 888, but added that no offer had been made.