Shares in British bookmaker Ladbrokes rose sharply on Wednesday and continue to climb following an investor purchasing 21.8 million shares at 170p, worth £37.1 million.
As the amount of shares purchased were under the 3 percent disclosure limit – a publically listed company has to disclose information of any shareholder who holds 3 percent of the company – the details of the investor remain a mystery, but sources in the city suggest it is Playtech founder Teddy Sagi.
Ladbrokes hired Playtech earlier this year to aid in the overhaul of its digital betting business, an area of Ladbrokes that is massively underperforming and is the main cause of at least four profit warnings in the past 18 months. Two weeks ago, Ladbrokes CEO Richard Glynn caused an uproar among company shareholders when he revealed profits stemming from the group’s digital division would be up to £17.5 million lower than expected this year.
Analysts do not think a takeover bid from Playtech is imminent, but have not ruled it out. Ladbrokes’ current share price values the company at £1,731.66 million, almost £500 million less than Playtech’s current market capitalisation.
Playtech is cash-rich at present, having sold its 29 percent stake in William Hill Online in April for £424 million, five years after acquiring that stake for £170 million. The company has already bought PokerStrategy.com for €38.3 million and could see Ladbrokes as the perfect company to invest in next.
The failings at Ladbrokes have not gone unnoticed in the investment world and there are rumours circulating of a bid for the company from CVC Capital, who you may recall purchased a 75 percent stake in online payment processor Skrill in August and were cited as possible buyers of Betfair for $1.5 billion in May.
At time of writing, Ladbrokes shares have risen 4.84% on Thursday to 188.50p while Playtech’s have risen 1.25% to 727.50p.
Bwin.party and 888 Shares Expected to Climb
Shares in bwin.party (BPTY) and 888 (888) are expected to follow in the footsteps of Ladbrokes and Playtech and climb from their current levels. Both companies are hoping for operating licences in New Jersey, a decision on which should be imminent considering Borgata was awarded the first licence yesterday. Head to PokerNews.com to read more on that particular story.
Lead image courtesy of The Guardian.