Friday, November 10, 2006

The British bookmaker Ladbrokes confirmed on Monday that it was in talks to
buy 888 Holdings PLC, the online gambling group. In a brief statement,
Ladbrokes said it "can confirm that it is in the early stages of reviewing a
possible transaction involving 888. No decision has been made as to whether
any proposal will be made to 888." In a telephone interview on Monday,
Kiaran O'Brien, a company spokesman, said the talks began a few days ago and
that it was too early to estimate the possible sale price for Ladbrokes. He
described an estimate of 470 million pounds (?702 million; US$892 million)
in the British media as too high.
888 Holdings is trying to prop up its business after the United States
effectively banned Internet gaming. The company was among several
London-listed gaming groups to close or sell their American business after
U.S. Congress added to an unrelated bill a provision that would make it
illegal for banks and credit-card companies to settle payments for online
gambling sites. U.S. President George W. Bush signed the law Oct. 14.
Consolidation within the online gambling industry has been widely expected
among company executives and investors after a sharp sell-off in the sector.
Analysts and media have speculated that PartyGaming PLC is among those
expressing an interest in 888. Both companies spoke earlier this month of
possible industry mergers. The London Times reported Monday that 888 is
believed to favor a tie-up with a traditional gaming company over another
online venture that would also be reeling from the U.S. move. On Friday,
PartyGaming, which was the world's leading online gambling company until the
American crackdown, laid off 800 of 1,750 staff who work on customer and
technical support in Hyderabad, India, the Times said.