Ladbrokes Open to Buying Online Gambling Sites
Although it failed to complete a purchase deal with Sportingbet, Ladbrokes has not ruled out the possibility of such deals in future, as stated by the present CEO of the company, Richard Glynn. The take-over deal with Sportingbet was ruled out owing to regulatory concerns.
Richard Glynn under Pressure
Facing tough competition from rival William Hill, Ladbrokes is under tremendous pressure to create an online gambling division. Glynn is expected to accomplish something concrete in this regard. He stated that Ladbrokes is open to buying online gambling companies in future under favorable circumstances. However, the prime focus of the company is to develop an online gambling division organically. In a series of interviews given this week, Glynn defended the action of his company to cancel the purchase deal with Sportingbet.
The company was in a similar situation a few years ago, when Ladbrokes made purchase deals with 888 Holdings – an online gambling company. Ladbrokes failed to finalize the deal even though the acquisition would have offered the company a lift in the international scenario of online gambling. A second attempt was made by the firm to purchase 888 Holdings early this year, but it fell-through due to a price disagreement.
Regulatory concerns came in the way of the deal which Ladbrokes initiated with Sportingbet. The concern was over the Turkish website of Sportingbet, through which the firm generated a large portion of its revenue. As Turkey has laws against online gambling, Sportingbet decided to sell off this division so that Ladbrokes can purchase its business without legacy risks. However, it was later revealed that Ladbrokes was not only concerned about the Turkish operations of Sportingbet, but also the liabilities from other nations the company traded with.
Ladbrokes was keener on buying the assets that Sportingbet held rather than the firm itself. It aimed to ringfence the fund derived from the sale of Sportingbet’s Turkish website to Gaming VC. The ringfenced fund would have been utilized to pay the shareholders over a period of 6 years.
Richard Glynn stated that there were issues regarding past and future liabilities of Sportingbet, and that these will have to be taken into consideration.