Betting merger mania on cards


Ladbrokes could start a wave of consolidation across the online gambling sector with an innovative £440m takeover plan for internet gaming site designed to avoid legal action in America.

Financial Mail revealed in November that the leisure giant was in talks with 888, but the deal has been stalled by fears that the bookmaker might be targeted by US law enforcers after acquiring 888.

Now Ladbrokes has devised a strategy to buy the assets of 888, leaving the UK-quoted company as an independent entity. Ladbrokes would therefore be distanced from any criminal liabilities faced by the online casino company.

Ladbrokes’ lawyers and bankers are working on a structure that strips out most of 888’s assets, including the intellectual property, customers and website. But it will stop short of buying the company as a whole.

One lawyer said: ‘If a company faces criminal liabilities in the US, selling up is not the end of it. The new owner will face the same criminal proceedings.

‘But this new structure gives Ladbrokes an interesting defence by separating the corporate identities of the two companies.’

According to one insider, non-executives on the Ladbrokes board have been scrutinising every legal detail and holding up the talks for weeks.

Paul Leyland, an analyst at stockbroker Arbuthnot, said: ‘Asset purchases are an excellent way for companies to buy into profitable growth while getting round the risk, which appears to allow licensed operators like Ladbrokes to have their cake and eat it.’

Ladbrokes shares closed at a record high on Friday at 449¼p.

(From Casino-Bingo: The Complete Gambling Guide for the British!)

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