MGM AND LADBROKES IN TAKEOVER TALKS WITH INTERNET GAMBLING SITES
04 November 2006
By : Simon Goodley And Ben Marlow
America’s MGM Mirage and Britain’s Ladbrokes, two of the world’s largest gambling groups, have started exploratory takeover talks with internet rivals decimated by recent US Congress legislation banning online gambling.
MGM, the world’s second-largest gambling group, is understood to have contacted a number of players in the sector, including poker market leader PartyGaming, to discuss a takeover.
Though talks are at an early stage, bankers involved with MGM stressed the US company’s interest was serious.Bankers stressed Las Vegas-based MGM wants to buy a market leader and is considering a move on any group created by a merger of PartyGaming and 888 Holdings, which are said to be in negotiations, along with Sportingbet.
Rumours forced 888 to reveal its hand by issuing a statement to the London Stock Exchange admitting it had been “very active” and was talking to “more than one party”.
The Business also understands that one party involved in these talks is Ladbrokes, which refused to comment except to say that it was watching the situation.
It has a popular online casino and poker website but these are dwarfed by its sports betting arm. It has made no secret of its desire to expand into European and Asian markets.
A brand clearly designed for the Asian market, 888 has no real sports betting offering. It derived about half its revenues and profits from the United States before that business was closed down but has been developing other territories.
At interim results in September, its last financial announcement before the American bombshell, 888 reported net gaming revenues had grown 61% in the UK and 16% in continental Europe. “The truth is that everybody is talking to everybody else,” said one source involved in discussions. “These things are at an early stage – the US situation only developed a few weeks ago.”
The move by Ladbrokes is in direct contrast to the bookie’s two great rivals – Gala Coral and William Hill – who have said they will not be acquiring online rivals.
Gala Coral is looking at buying the Tote, the state-owned pool betting business, while William Hill chief executive David Harding has ruled out any approaches.
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