Ladbrokes In £2.2bn Merger Talks With Playtech

According to latest reports, gaming software company Playtech Ltd are currently in the middle of exploratory merger talks with Ladbrokes Plc.
When Ladbrokes CEO Richard Glynn took over the post in March 2010, he was given the “clear mandate to grow the company organically” and in particular address the issue of Ladbrokes weakness in its online gaming capabilities.
Ladbrokes is the number one bookmaker in the UK, Ireland and Belgium and although Ladbrokes also has an online presence offering sports betting, casino games and poker, its market share pales in comparison to its business competitors, especially William Hill.
However, a potential merger between the two companies would certainly help Ladbrokes address such issues by transforming the company into one which, in addition to its 2,700 betting shops, would also be capable of supplying software and online games to the casino, betting and poker industries.
The merged company would then have a valuation of around £2.2 billion ($3.5 billion) and have the potential to make a major impact on the global gaming industry.
All the same, the talks are currently ‘exploratory’ and it is also believed that various obstacles still lie in the way of a deal, including conflict of interests. For instance, Playtech already provides services to several of Ladbrokes’ rivals including Betfred, the Tote and William Hill.
In addition, Playtech has a joint venture already in place with William Hill plc called William Hill Online (WHO). Playtech owns a 29% stake in the business and received €30.8 million from it in 2010.
Nonetheless, after the Telegraph announced the news of the talks Playtech’s share increase 4% to £4.02, although it has since dropped back down to £3.91.
As the talks continue, Ladbrokes are considering all its various other options and as an anonymous source said to The Telegraph this week; “If there’s a way he [CEO Richard Glynn[ can get to where he wants to get to quicker, he will look at it.”
Ladbrokes are also currently looking into making a £240 million takeover bid of online gambling group 888 Holding plc.