UK-listed bookies Ladbrokes saw their shares jump on Thursday as rumors spread that rival Paddy Power was mulling a takeover bid.
On Wednesday, the Daily Mail’s This Is Money offshoot reported that 25.5m Ladbrokes shares had changed hands, which the paper claimed was Paddy preparing the ground for a £1.6b bid for Ladbrokes. Neither company has yet seen fit to comment on the rumors.
Ladbrokes has struggled to match its peers’ online successes, leading new CEO Jim Mullen to promise an operational review report by June 30. In contrast, Paddy Power’s online arm is going great guns and the addition of Ladbrokes’ UK retail business would satisfy Paddy’s long held desire to expand its UK retail footprint.
The UK market has witnessed a flurry of merger and acquisition activity, including multiple offers for struggling online operator Bwin.party digital entertainment. The UK gov’t hasn’t made life easy for its betting industry with the new 15% online point-of-consumption tax, an increase in the Machine Games Duty and promises of a new Horserace Betting Right to replace the old Levy system.
BOYLESPORTS CHALLENGE LADBROKES IRISH RETAIL EXAMINERSHIP
Meanwhile, Ireland’s High Court has agreed to hear Boylesports’ challenge of Ladbrokes’ efforts to restructure its Irish retail operations. Ladbrokes put its loss-making Irish retail biz under examinership in April but Lads’ Irish landlords have protested what they feel are insulting compensation offers for exiting unprofitable betting shop leases.
Last month, Boylesports indicated it was considering making a bid for Lads’ Irish retail holdings. On Wednesday, the High Court announced it would hear Boylesports’ challenge next Friday (12). Boylesports’ “eight-figure” bid would reportedly involve less shop closures than Lads had envisioned, thereby preserving more Irish jobs. Boylesports has reportedly also offered Lads’ landlords better terms to wrap up unwanted leases.
The Irish Times reported that Boylesports has complained that Lads have failed to provide access to information Boylesports requires in order to finalize its takeover bid, including turnover figures for individual betting shops. Boylesports has also accused Lads of rigging the examinership so that there’s no chance the business transfers ownership.
