UK bookmaker Ladbrokes plc (LSE: LAD) is reportedly in merger talks with Playtech Cyprus Ltd. (AIM:PTEC), the world's largest gaming software provider. Playtech is controlled by Teddy Sagi, who owns about 40% of the company. The two companies are talking about a merger worth ₤2.2 billion ($3.5 billion), which could change the face of the global gambling industry, UK newspaper "Daily Telegraph" reported today.
The report said that the bookmaker has asked investment banks UBS and Greenhill to sound out Playtech over a potential strategic partnership between the two companies, with a share-based merger among the options being discussed.
The talks are in their early stages and are being held alongside an attempt by Ladbrokes to negotiate a £240 million takeover of Internet gaming group 888 Holding plc (LSE:888), controlled by Avi Shaked.
Uniting with Playtech would transform Ladbrokes from a business working directly with consumers, through more than 2,700 betting shops, to one that also supplies software and online games to the betting, casino, and poker industries.
Such a move would also place obstacles in front of the joint venture set up between UK rivals William Hill plc (LSE:WMH) and Playtech in 2008 called William Hill Online.
Last month Playtech reported a 26% rise in 2010 profit to €173 million with profit from its 29% stake in the joint venture with William Hill up 37% in 2010 to €30.8 million.
Playtech's share was up 4% by midday in London to ₤4.02, giving a market cap of ₤937 million.
Published by Globes, Israel business news - www.globes-online.com - on February 9, 2011
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