Strong fourth quarter revives 888's takeover hopes

 
City A.M. Reporter
Online gaming firm 888 has said it remains hopeful of being taken over by Ladbrokes after reporting better-than-expected fourth-quarter revenues.

Chief executive Gigi Levy said negotiations were continuing, with no major obstacles in the way of a deal – contradicting a report in the Mail on Sunday, which claimed the talks were on the verge of collapse over disagreements on price.

"It's definitely not off the table," Levy told Reuters. "There is still interest on both sides in doing a deal. Every big deal has complexities, (but) there's nothing which is a big sticking point. There's a variety of things (to negotiate) like in any deal. We're trying to see whether we can tackle them or not."

A spokesman for Ladbrokes declined to comment on the progress of the talks.

Shares in 888 were up almost seven per cent at lunchtime.

Numis lifted its price target on the stock to 50p from 44p previously, saying the "end game is approaching for 888".

"We believe there is a good fit between the two businesses and that both sets of shareholders should be supportive of a deal," Numis analyst Ivor Jones said.

888, which offers gamblers the chance to play casino, poker and bingo games online and also provides software to companies including Harrah's Entertainment, said operating income rose to $71m (£44m) in the fourth quarter of 2011, up 18 per cent on the quarter before.

The performance was boosted by a turnaround in the performance of the group's poker business following a relaunch in the middle of last year.