Gaming giant Ladbrokes pulls out of takeover moves for Sportingbet

Betting giant Ladbrokes yesterday walked away from its second takeover approach this year as it called off a potential bid for rival Sportingbet.

Ladbrokes chief executive Richard Glynn said the abandoned approach saved the company from entering a deal which would not have delivered value for its shareholders.

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

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.

Ladbrokes was reportedly considering a bid of up to 70p a share for Sportingbet, equivalent to more than £450 million.

Glynn said the company’s main focus was now 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 firm’s sights, Glynn said, but opportunities will be considered when they arise.

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

He said the one-off cost of the abandoned bid would be revealed in the group’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 17 October to make a firm offer or walk away. A deal would have increased its presence in faster growing areas such as live betting during a sports match, an area where Sportingbet specialises. Ladbrokes is due to issue a trading update on Thursday.

Shares in Sportingbet fell by 8.75p, or 19 per cent, to close at 37p with Ladbrokes closing 0.9p down at 119.7p.