Ladbrokes Call Off Talks With Sportingbet


Britain's biggest betting firm Ladbrokes Plc and online gaming firm Sportingbet Plc called off bid talks, scuppered by regulatory worries over Sportingbet's Turkish business. "The potential benefits and risks associated with a combination with Sportingbet were clear to us from the outset and have been well covered by the market," said Ladbrokes CEO Richard Glynn in a statement on Monday. "Having completed our analysis we have been unable to agree a structure which delivers increased shareholder value within an acceptable regulatory environment. We have therefore agreed to end our discussions."



Ladbrokes had been in talks with Sportingbet since June, but Sportingbet's online gambling business in the tough regulatory regime of Turkey was seen by analysts as a stumbling block to a successful takeover .


Sportingbet has no assets in Turkey but operates a website offering bets to Turkish residents. Ladbrokes has pulled out of previous deals because of its aversion to operating in unregulated territories.


Glynn said on a call with reporters he did not believe Ladbrokes was a risk averse company but saw too many hurdles to a Sportingbet deal. "There's just not a structure we can agree on that gives our shareholders an acceptable level of ... regulatory risk," he said.


Glynn did not rule out future acquisitions but said 98 percent of Ladbrokes' business was and continued to be based on organic or self-generated growth. "Sometimes the best deals you do are the ones you don't," he said.


Analyst Simon French at brokerage Panmure Gordon said: "In essence it sounds like it's back to plan A, which is 50 million pounds ($78 million) of investment in the (online) division over two years.


"I think it's concerning that they (Ladbrokes) continue to enter talks with companies and then don't seem to be able to close out the deal. It begs questions about whether other companies will be willing to enter acquisition talks with them in the future".


Sportingbet said talks continued to sell the Turkish gambling business to smaller peer GVC Holdings Plc continue. It had put the business under review before the Ladbrokes approach as it attempts to reduce regulatory risks.


It was not in any other offer talks and was confident of its future as an independent company, it said.


Sportingbet shares, down 6 percent in earlier trade after press reports the deal was about to be pulled, plunged further after the confirmation to stand at 38 pence at 1305 GMT, a fall of 18 percent. Ladbrokes shares were down 2 percent at 118p. ($1 = 0.640 British Pounds) (Additional reporting by Sarah Young; Editing by David Holmes)

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