Various rumors are circulating that in order to become part of “the Lads”, Sportingbet is seriously considering upping sticks and leaving Turkey. Some say that it’s to do with the impending takeover that Ladbrokes is planning. Others seem to think it emanates from the Lads holiday to Turkey earlier this year that didn’t go according to plan. Something about a trans…we should really stop there.
Back in the UK, Ladbrokes’ expected bid of 80-90p per share would be more likely to go through were Sportingbet to dispose of the country that accounts for 15% of the net gaming revenue. They first entered the country in 1998 and it was all fine and dandy for almost ten years. That was before the government effectively outlawed all online sport betting outside of the state-owned IDDAA in 2007.
The company’s statement to the London Stock Exchange read, “The company confirms that, as part of its long-term strategy of increasing the proportion of its business mix derived from regulated markets, it is currently undertaking a review to evaluate its strategic options in relation to its Turkish language website business. This review may lead to an exit from this business.”
Analyst James Hollins told eGR that news of their exit from Turkey showed the company was “taking a direct and sensible approach to ‘dealing with’ its Turkey issue”, which offered “strong, secure returns, but was ultimately unloved by the market”.
Hollins has already issued a buy recommendation on Sportingbet and drove this home by commenting, “The potential sale could, we think, realise a ‘surprisingly’ strong cash injection into the group (surprising, as in the markets value Turkey at next to nothing), possibly into three figures (£100m). This would (1) resolve the Turkish issue, (2) improve net cash, (3) increase the likelihood of a Ladbrokes offer and (4) drive an improved share price, in our opinion.”
With regulation also taking place in Greece and Spain, two of their core markets; it’ll be interesting to see their next course of action. Turkey is well and truly off the canteen menu though.