Saturday, June 6, 2015

Is Paddy Power Taking Over Ladbrokes?

Is Paddy Power snapping up shares of Ladbrokes ahead of a possible takeover attempt? That’s the rumor that sent Ladbrokes stock soaring during this week’s trading on UK markets.

Speculation about the possible takeover picked up steam when someone recently picked up somewhere in the neighborhood of 25.5 million Ladbrokes shares, according to ThisisMoney.co.uk.

While there’s no evidence that Paddy power was behind the move, that didn’t stop speculators from jumping on the Ladbrokes bandwagon. All that gossip caused Ladbrokes shares to spike during trading hours.

According to theories posted in multiple publications, including CalvinAyre.com, Ladbrokes is looking to make an offer somewhere in the neighborhood of £ 1.6 billion ($ 2.45 billion USD).

The idea behind the move is to grab hold of Ladbrokes, and its struggling online arm, before the company’s new CEO, Jim Mullen has a chance to make any meaningful changes.

Mullen, who cut his teeth at William Hill, is a gaming industry veteran who has the potential to turn Ladbrokes’ under-performing online unit into a significant competitor to Paddy Power.

Don’t let Ladbrokes’ online success, or lack thereof, give you the wrong impression of the company. It still boasts a solid retail business in the UK and that’s something Paddy Power covets in a big way. Though Paddy Power has a solid retail arm of its own, adding Ladbrokes’ retail operation to its own shops would significantly increase its presence in the UK market.

The UK betting business has been hit hard by the recent implementation of a point of consumption tax (POTC) that’s triggered a series of mergers and acquisitions in the industry.

So far, there’s been no comment on the matter from either Ladbrokes or Paddy Power.

 

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