Sportingbet shares sharply higher

Also Sportingbet might purchase CentreBet down the road and get 1/3 of Aussie market


Sportingbet confirms approach from Ladbrokes

By Roger Blitz, Leisure Industries Correspondent




Sportingbet’s shares rose sharply after the online gambling company revealed it had received a “highly preliminary” approach from Ladbrokes.
A statement from Sportingbet said the approach from the UK bookmaker “may or may not lead to an offer being made”. The shares rose by as much as 19 per cent and at midday on Thursday were at 49p, up more than 15 per cent.





Ladbrokes has fallen behind rival William Hill in online gambling and has been scouring possible acquisitions. Talks between Ladbrokes and 888 Holdings broke down in April and in February chief executive Richard Glynn announced plans to invest £50m on its online strategy.
Next week, Mr Glynn will announce a re-organisation of senior management, which sees the departure of Gary McIlraith who was in charge of the online division for less than a year.
Sportingbet, specialists in sports betting, has been cementing its position in Australia. It is fund-raising for up to £125m to purchase Australian betting operator Centrebet. The deal would give Sportingbet a third of the Australian online betting market.


It was a prominent operator in the US until authorities clamped down on online betting in 2006. Sportingbet in September signed a non-prosecution deal with US authorities, forfeiting $33m. Sportingbet had been toying with a merger with Swedish-based operator Unibet, but talks faded.
James Hollins, analyst with Evolution Securities, who has a target price of 75p for Sportingbet, said Ladbrokes was “highly UK-centric” and lacked the brands to make inroads abroad.
“We think that a deal makes sound strategic sense for Ladbrokes as it would instantaneously establish a market-leading position in more than 10 global territories, including the key Australian, Spanish and Greek markets,” Mr Hollins said.


He added that a bid valuation of 80-90p could suit both parties.