Bookmaker has reportedly asked investment banks to sound out one of the world’s leading gaming software developers regarding a merger.
The online gambling industry could be in for another major merger this year after reports emerged that giant operator Ladbrokes is in exploratory talks with Playtech Limited regarding unification. Isle of Man-based Playtech is one of the world’s leading developers of gaming software and Ladbrokes has allegedly instructed investment banks UBS and Greenhill to sound it out over strategic tie-ups including a share-based merger that could be worth up to £2.2 billion. According to a report from The Telegraph newspaper, Ladbrokes’ overtures to Playtech ‘highlight the radical thinking going on at the bookmaker under Richard Glynn, its new Chief Executive Officer,’ while any merger would transform the Harrow-based firm from a consumer-facing business with more than 2,700 betting shops to ‘one that also supplies software and online games to the betting, casino and poker industries’. Any deal for Ladbrokes could prove difficult as the software firm currently supplies many of the operator’s competitors including BetFred and, most crucially, William Hill. London-based William Hill owns 71 percent of the William Hill Online joint venture it established with Playtech in October of 2008 and has an option to buy the software company ‘after four and six years on an independent fair value basis’. The Telegraph revealed that the online venture generated £26.2 million in profits for Playtech last year while Neil Cooper, Finance Director for William Hill, was quoted as stating that his firm’s arrangements with Playtech were ‘commercially sensitive’. Ladbrokes is also in ‘ongoing’ talks with 888 Holdings, one of the world’s largest online gaming operators, regarding a separate merger.
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