Ladbrokes are making sure that every dog indeed has its day with yet another round of takeover talks, this time with betting exchange Betdaq. A statement from the bookie confirmed they are engaged in “discussions regarding a potential future acquisition” and that negotiations are “ongoing” with “no certainty that an agreement will be reached”.
So far it’s par for the course as far as takeover discussions are concerned and it follows a two-year period during which it’s very much been a case of Lads on Tour instead of a settling down and starting a family. It started with chief executive Richard Glynn attempting a takeover of 888.com that broke down barely long enough for a quickie on a Magaluf sunlounger. Then came the infamous Sportingbet discussions that ended acrimoniously after they found their beau cavorting on a Turkish beach with the other cool kid in their year. What’s to say the Betdaq will be different then?
The reason for requiring Betdaq is very different to the deals they were attempting to sign with both 888 and Sportingbet. The two previous deals were being done to secure shares in markets, such as Australia, where they are already lagging behind competitors. In comparison the Betdaq one is with a company they already have a partnership with and one that gives them the second-largest exchange product on the market. That in itself widens its offering when compared to rival William Hill, who doesn’t have an exchange product.
Betdaq has also had a busy couple of years with the firm pulling out of the Australian market in July 2011 after an investigation by local media found a problem with the legality of its operations over there. Any legal problems with the exchange or it operating in grey markets could scupper the deal much like happened with the Sportingbet takeover.
A takeover was first mooted this time last year – the same time as a partnership between the two was discussed that would have allowed Ladbrokes to use Betdaq’s exchange technology. The Lads were obviously so impressed with what Betdaq has to offer that a full takeover was the only logical course of action.
Good news for Ladbrokes is that those that matter have received the deal well and the share price has risen by a modest 0.54 percent to 203.30pence – the highest amount over the current 52-week fiscal year.
Saying that, one analyst in particular isn’t convinced by the move with Simon French, of Panmure Gordon, adding: “Acquiring Betdaq would provide Ladbrokes with broader product reach and may reduce leakage of certain customers to Betfair, but significant investment in product and marketing would likely be required for Betdaq to become a material profit contributor to Ladbrokes.”
We can expect much talk over the next few months as they get to work on the nuts and bolts of the deal and it might eventually be the case that we’re talking of Ladbrokes as the number two exchange on the planet. Being number two in one sector doesn’t necessarily have any effect on efforts in another sector and the task of overhauling William Hill’s lead is still as tricky as ever and until online is properly sorted out the effort will continue to be a losing one.
