Ladbrokes ends Sportingbet pursuit

UK betting giant Ladbrokes today spurned a second major takeover opportunity after walking away from a bid for rival Sportingbet.

Ladbrokes chief executive Richard Glynn said the abandoned approach was not a “failure” and saved the company from entering a deal which would not have delivered value to its shareholders.

Ladbrokes, the UK’s largest betting firm, scrapped talks with Sportingbet as the market became more turbulent and amid concerns about the legacy risks attached to its target’s Turkish operation.

Mr Glynn said: “Having completed our analysis we have been unable to agree a structure which delivers increased shareholder value within an acceptable regulatory environment.”

The high street bookie failed to conclude a deal with another online gambling group, 888, earlier in the year after the two sides could not agree on a price.

Shares in Sportingbet slumped nearly 20% after the announcement, leaving the online betting company’s market value at £247.8m. Ladbrokes was reportedly considering a bid of up to 70p a share, equivalent to more than £450m.

Mr Glynn said the company's main focus was on its "organic growth strategy", which will involve a relaunch of the brand and a nationwide TV campaign.

There were no other takeover targets in the company’s sights, Mr Glynn said, but opportunities will be considered when they arise.

Asked if he felt any personal pressure following the collapsed talks, Mr Glynn said: “This is not a failure. The biggest failure would be doing a deal that did not deliver shareholder value.”

Mr Glynn said the one-off cost of the abandoned bid would be revealed in the company’s next set of results.

Sportingbet is on the brink of selling its business in Turkey, where online gambling is banned, but Ladbrokes’s lawyers were understood to be concerned about a regulatory hangover from ownership of the site.

While Turkish companies have been banned from providing online betting since February 2007, Sportingbet’s operations in the country are run offshore.

Ladbrokes first made an approach to Sportingbet in June, and under takeover rules had until October 17 to make a firm offer or else walk away.

A deal would have increased its presence in faster growing areas such as “in-play”, or live betting during a sports match, an area where Sportingbet specialises. Ladbrokes is due to issue a trading update on Thursday.