Nationwide's Virgin Money swoop blasted by Aussies: Bank's biggest independent investor 'disappointed' with board agreeing £2.9bn takeover
TONY HETHERINGTON: Boss behind firms fined £340k for more than 1.4m nuisance calls is unmasked
Cash in on the Northern property boom as our experts reveal the university city that offers landlords a huge 14% annual return
Councils that ban you from car parks if your vehicle is TOO LONG: Five now have length restrictions as most authorities say they've no plans to extend bay sizes
86-year-old's woes with a faulty smart meter that sent his bills soaring show why so many people are shunning them, writes JEFF PRESTRIDGE
Gerald Seymour has written 40 pacy thrillers, but big screen success hasn't materialised: 'Hollywood silly money? I'd only have stuffed it under the bed!'
British businesses awash with 'accidental' bosses who have received no formal training, recruitment firm warns
Gold is seen as a solid investment in times of turmoil - experts share their 24-carat advice on how (and when) to get involved
MIDAS SHARE TIPS: Why it soon won't be hip to give the cold shoulder to Smith & Nephew
FTSE 100 hits an all-time high - but remember the stock market adage of 'sell in May and go away' says HAMISH MCARE
North Sea projects worth £21bn put at risk by Labour: Tax threat to British jobs and investment
Rachel Reeves wants to banish the idea that Labour is anti-business, but where is the 'white heat' revolution to revive Harold Wilson's glory days?
Helium and hydrogen company set to join stock market in boost for City
CITY WHISPERS: Bill Ackman's cerulean eyes charm 'Woodstock' crowd at Berkshire Hathaway
Should the Bank of England have cut interest rates instead of holding firm? The This is Money podcast
Households with emergency savings pots rises substantially in recent years - five financial trends revealed in new research
Families with TWO retired generations will surge to one million in a decade: Savings have to stretch further if you want to help out your loved ones
'My oven is redundant': Almost half believe ovens will be obsolete as air fryer craze shows no signs of slowing
Some sneaky estate agents only putting forward offers from buyers who use their in-house mortgage broker
From Victorian to Regency, the five most popular types of period property currently for sale revealed
Bank of England holds interest rates at 5.25% for sixth time in a row - what it means for YOUR mortgages and savings
When will interest rates fall? Forecasts on when base rate will be cut - and what borrowers and savers should do
How much would a rate cut save you? Use our interest rate rise or fall mortgage calculator
We're financial experts - this is how you can use your Isa and pension to grow your wealth in the new tax year

888 shares jump as Ladrokes confirms talks

By This Is Money
Updated: 04:06 EDT, 20 December 2010

View
comments

Shares in internet casino and poker group 888 have leapt 19% after bookmaker Ladrokes confirmed it was in early stage talks about an offer for the business.

Poker face: Ladbrokes says it is in 'very preliminary' talks about an offer for 888

The stock was up 9.25p at 58.25p, while Ladrokes slipped 0.1p to 127.4p in morning trading.

Ladbrokes' move comes four years after a previous £470m attempt to buy 888.

That deal fell through because of concerns 888 might be targeted by the US Department of Justice as part of a crackdown on online gambling.

Labrokes' latest approach, understood to be for around £240m or 70p a share, would be the first big move by new chief executive Richard Glynn, who took over earlier this year after serving as chairman of spread-betting company SportingIndex.

If successful, it would be the first takeover by Ladbrokes since it was demerged from the Hilton hotels group five years ago. The earlier bid attempt, by former boss Chris Bell, ran aground because of concerns over the DoJ's clampdown.

Unlike rivals, 888 has still not struck an immunity deal with the US authorities.

PartyGaming and Sportingbet have paid £68m and £21.2m respectively to the DoJ to ensure they are not prosecuted.

'Ladbrokes confirms that it is in very preliminary discussions with 888,' the company said in a statement. 'There can be no certainty these discussions will ultimately lead to an offer for 888 being made, nor as to the terms of any such offer.'

Consolidation in the online gaming sector has been expected following the merger of PartyGaming and Bwin in the summer to create the world's largest internet gambling company. At the time chief executive Gigi Levy said 888 was considering following suit.

'We look at consolidation as one of the possible routes to realising our full value and feel that longer term this is the direction the industry will take,' he insisted.

Ladbrokes' internet business is seen as a weak point for the company and it has lost ground to its rival, William Hill, after the latter entered an online joint venture with Playtech.

The bookie is being advised by Deutsche Bank and Greenhill, but it is understood 888 has courted other possible bidders, including online rival Sportingbet. In the spring 888 issued a profit warning and in September abandoned its dividend after profits plunged in the first half of the year.

It blamed an industry-wide slump in online poker for a 43% fall in pre-tax profits to £5.4m in the six months to June, compared with £9.7m in the same period of 2009.

The company's shares rose strongly on Friday amid speculation it may be a bid target for US group Caesars Entertainment.

The firm was built by Israeli brothers Avi and Aaron Shaked and Shay and Ron Ben-Yitzhak. The Shakeds stil own around 50% of the parent company and the Ben-Yitzhak family around 11%.

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.