Home » 888 Shares Up
Shares in beleaguered online gambling company 888 Holdings rose sharply on Monday following an announcement by Ladbrokes, a British gambling group, that they are considering a possible takeover bid.
Following the US anti-online gambling bill being passed through the Senate last month, and the subsequent 888 decision to withdraw from the US market, shares in the publicly listed company went into freefall, losing around 35% of their listed value almost overnight.
888 and other publicly listed companies such as PartyGaming have become prime targets for takeover bids due to their low share price. Consolidation and acquisition are all the buzz in the online gambling industry, and news River Belle Casino that Ladbrokes was looking at a possible $1 billion buyout of 888 was greeted warmly by investors, allowing 888 Holdings to make up some of their recently lost value.
888 Holdings listed in September 2005 with an opening share price of 175p a share and with a total market value of around $1.4 billion. Its shares continued to climb late 2005 and early 2006, reaching a high of 263p in April. The share price is currently trading at around 120p, after dropping to around 90p following the US Congress passing the anti-online gambling bill.
A Ladbrokes spokesman announced on Sunday that his company was in the early stages of discussing a possible buyout proposal with 888 Holdings, following industry-wide speculation that Ladbrokes was entering the acquisition fray.
888 has so far declined to comment on the Ladbrokes statement, but they have made no secret of their understanding that a merger with another company might be necessary, having been involved in talks with PartyGaming last week about a $2 billion merger.
Industry analysts estimate 888 Holdings will fetch up to $1 billion from a possible buyer.