UK betting operator Ladbrokes has reportedly inked a deal to buy Australian independent bookie Betstar. The Sydney Morning Herald reported that the deal, said to be worth between A$20m–$25m (US $18.7m–$23.4m), could be announced as early as Wednesday. Ladbrokes made its initial foray into the Aussie market last August via the £13m purchase of Bookmaker.com.au owner Gaming Investments and the Betstar deal could boost Ladbrokes Australia’s market share over 5%. The Melbourne-based Betstar is believed to have annual turnover between $250m and $300m from a customer base of over 100k.
In November 2012, Betstar owner Alan Eskander had vowed not to join the herd of Aussie bookmakers selling out to UK firms, saying he had no interest in just “sitting on the beach” counting his millions. However, one month after Ladbrokes’ Gaming Investments purchase, Eskander acknowledged that a “big offer” could make him rethink his position on selling out. Ladbrokes is believed to have beaten back a $15m bid from another independent bookie, BetEzy, which was acquired last month by Sportsbet founder Matt Tripp for less than $10m (and subsequently rebranded as Beteasy).
Meanwhile, back in Ladbrokes’ home market, the company’s sluggish transition to its new Playtech-powered online platform and the UK government’s recent announcement of an increased tax on fixed-odds betting terminal (FOBT) revenue is taking its toll. Last week, multiple analysts cut their target price for the company’s shares, which have fallen nearly a quarter since the year began. Finncap cut its target from 160p to 130p, Goodbody cut from 140p to 115p while Goldman Sachs cut from 125p to 112p. Nine equities analysts have rated the stock as ‘sell,’ ten have a ‘hold’ rating and just three suggest it’s time to buy, buy, buy.
Over the weekend, the Daily Mail’s financial pages claimed a group of figures from the world of horseracing was waiting until Lads’ stock fell a little lower before swooping in with a takeover bid. The ‘Coolmore set’ of JP McManus, John Magnier, Derrick Smith, Michael Tabor and Dermot Desmond are reportedly willing to pay £1.5b to acquire the struggling bookie. Desmond and Lads have a history, as he sold his Betdaq betting exchange to the firm last January.