Ladbrokes trying to buy 888.com
English betting website Ladbrokes has been interested in 888.com for quite some time. In fact, they made an offer of around 470 million pounds to buy 888.com in 2007. However, the offer fell through when Ladbrokes was worried that 888.com could be prosecuted by the United States. 888 still has yet to work anything out with the US government unlike SportingBet, which recently paid the US $33 million as part of a settlement.
Even still, it seems like the fears have subsided because Ladbrokes made another offer that’s worth 240 million pounds. Obviously, the 240 million pounds is a far cry from what was offered in 2007, but 888.com has ran into some tough times recently. In the first half of 2010, their profits fell by 56% ($4.3 million), which left the company trying to cut costs and reorganize their business model. They also chose not to issue dividends until the end of the year so they could reinvest into 888.com.
Of course, Ladbrokes hasn’t been doing so well either. A couple of months ago, a shakeup was announced where Ladbrokes fired/demoted several key personnel members. Egaming manager Ed Andrewes was fired along with head of gaming Andy Harris; sportsbook manager Paul Witten was demoted.
Ladbrokes decision to clean house with several top managers, as well as their purchase of 888.com, is part of a plan by new CEO Richard Glynn to compete with fellow English betting company William Hill. Glynn has named the plan “Project Galvanise,” and it’s designed to close a growing gap between William Hill and Ladbrokes. In addition to competing with William Hill again, Glynn also wants to double the price of Ladbrokes’ stock prices.
It would be amazing if Glynn’s plan works considering the fact that online gambling revenues have been dropping as of late.