888 Holdings could be set for a takeover according to reports circulating around the financial forums and articles that have appeared in the Wall Street Journal and The Independent.
Private equity group Permira is the name being banded around at the moment as potential buyers for the Gibraltar based gambling firm that have been a main player in the online gaming world since 1997.
The news came on the same day that Permira announced it was in the process in offloading some €850 million worth of shares in German fashion house Hugo Boss, a company it spent €5.3 billion on a controlling stack in 2007.
An article on the Wall Street Journal website states “a new licensing and tax regime for online gaming in the UK is clearing the air around the sector, and making one of the industry’s biggest players, 888 Holdings PLC, a potential buyout target.”
Shares in 888 leapt 9p to 135.25p in late trading on Wednesday after the takeover reports emerged, but have since fallen to 128.50 by 1:00pm on Thursday.
888 Holdings PLC has a market capitalisation of £455.32 million – the face value of its shares – but would command a much higher price, not least because the company continues to release impressive financial figures and shows continued growth despite challenging times for the gambling and poker world.
It is not the first time that 888 has been the target of a possible takeover. In March 2011, rumours circulated that Ladbrokes were planning to buyout 888, but that deal never got off the ground.
If Permira does press forward and attempt a takeover, 888 would become yet another major online gaming company to be taken over in 2014. Of course, it will not be on the same scale as the $6.4 billion purchase of IGT by GTECH or the $4.9 billion takeover of Rational Group by Amaya Gaming, but it does go some way to show that investors have faith in the online gaming world and see a healthy future for it.