Casino-on-Net 888 Still in Talks with Ladbrokes


Online gambling company 888 PLC reported better-than-expected trading since withdrawing from the US market, but there was no further update on a possible takeover by Ladbrokes.888 PLC, parent company of Casino-on-Net, released an update on performance results this week, reporting that revenue from countries outside the US rose 12%. Revenue across the group increased by 7% in 2006, despite the US shutdown. Net gaming revenue for the year reached $290 million compared with $271 million in 2005.

Like other online gambling firms, the new priority for 888 will be to diversify geographically in the way of the UIGEA, a US law which seeks to ban online financial transaction with online gambling companies.

888 now has 3.6 million customers and is still in discussions with Ladbrokes about a possible merger. The two companies have been in dialogue over the potential deal since early November, but a well-placed source told AFX News investors should not read too much into the length of time being taken. The source said the time taken reflects due diligence and the assessment of legal risks associated with the potential takeover. Ladbrokes is understood to be looking at ways to protect itself from any possible future criminal liabilities if it acquires 888.

If Ladbrokes passes on the opportunity, there will be several other parties interested in the business. PartyGaming has previously been linked with 888.888 has recently embraced the mobile gambling revolution, introducing the ‘mobile casino’, which enables gamblers to play Blackjack, Slots and Roulette on their mobile phones and PCs with the one account. The software is compatible with almost 85% of the European market.

888 is trading at 109p, but broker Numis reiterated its ‘buy’ recommendation and 148p target price, noting 2006 revenues were ahead of its forecast and saying trading in 2007 is above expectations.

‘We continue to view as the way to play the online gaming sector as the group has a robust balance sheet with 117 mln usd of net cash at the end of 2006, has a sizeable UK business with approximately 45-50 pct of the net gaming revenue, and is an attractive bid target,’ the broker said.

Related – Casino-on-Net Review / Ladbrokes Casino Review /

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