Online gaming firm 888 Holdings Plc confirmed today (Monday) it has
held talks with third parties since the United States banned Internet
gambling financial transactions at the end of September. The confirmation
follows weekend media reports in the United Kingdom that 888.com and
Party Gaming.com were holding preliminary talks about a possible merger.
In a statement 888 said it had held "various preliminary
discussions with third parties following suspension of its U.S. activities,"
adding that there was no certainty that the discussions would proceed
to an offer being made for the company or any other action.
Earlier reports said executives from the two companies - which would
have a joint market capitalization of almost GBP1.6 billion ($3 billion)
- expected to hold further talks in the coming weeks as gaming firms
consider options to combine their online pool of players in the wake
of the U.S. changes.
PartyGaming was not immediately available for comment.
According to the Sunday Times both firms have been trying to find
a way to cope after sales were hit by the introduction of laws banning
online gambling financial transactions in America. Party Gaming, the
world’s biggest online poker group, fell out of the elite FTSE
100 group of companies, while 888 Holdings dropped out of the FTSE
250 index. Their shares collapsed when both firms said they would
cease trading in America, decimating market values.
Other firms also trying to find ways to consolidate include Sportingbet,
the AIM-quoted company whose former chairman, Peter Dicks, was arrested
in America last month, Excapsa, which is also listed on AIM, and Bwin,
an Austrian internet betting firm.
The big gaming companies are looking to acquire rivals that have a
strong European or Asian presence. For example, Party Gaming has been
linked with a deal to buy Gamesys, which is big on the Continent,
and Victor Chandler, the bookmaker that has the biggest player base
in Asia.
Ten days ago when Party Gaming released its “key performance
indicators” for the third quarter, Mitch Garber chief executive,
told analysts the company was in talks with several parties. Two weeks
ago, Garber told The Sunday Times: “Consolidation is,
in my view, the most sensible way to grow the business right now.”
In related news the Telegraph reports that the major UK betting group
Ladbrokes might be looking to make some relatively cheap acquisitions
in an industry damaged by recent U.S. legislative actions.
The Telegraph newspaper claimed that Ladbrokes is circling the troubled
online gaming industry and hopes to cash in on the companies' distressed
valuations. Merger and acquisition talks between internet betting
firms are rife as they attempt to mitigate the loss of their US operations,
damaged after legislative changes in America which wiped billions
off the value of online betting shares.
Traditional casino operators and bookies are now circling the industry,
the Telegraph reckons, looking to cherry pick the best assets at knockdown
prices. They expect rapid growth across Europe and Asia.