Sportingbet's Take-Over Deals on a Halt, Reveals OnlineCasinosRealMoney.com
Reports suggest that when the deal fell-through, it wiped out nearly 20% of the shares of Sportingbet. The bookmaker saw a drop in its shares from 37p to 8.75p.
BOLTON, ENGLAND, October 22, 2011
Online gaming company Sportingbet, made a recent purchase deal with two companies, Scandic Bookmakers and Danbook. The deal was finalized shortly after Ladbrokes called off its plan to take-over Sportingbet.The CEO of Ladbrokes Richard Glynn said that the potential risks and benefits associated with the deal were quite clear to the company. After analyzing the situation, the Ladbrokes team failed to chalk out a plan that would enhance the share value of the company under an accepted regulatory framework.
Key Reasons for the Deal's Failure
The key factor behind the deal failing to take shape is the Turkish website of Sportingbet. Although the website does not hold any assets, it offers services to local players. A spokesperson of Onlinecasinorealmoney.com, a site that provides comprehensive information to players on casino gaming, stated that, considering the strict regimes of the Turkish law, such operations come with a lot of risks for the website.
Jurisdiction is asserted by the country's laws over any action that doesn't fall under the provisions of the Turkish Law, as stated by Sportingbet. The company acknowledged that its gambling activities are considered illegal according to the provisions of the Turkish law. The issue was flagged up in the prospectus of the company when it moved on to London Stock Exchange's prime market last year.
Ladbrokes' CEO on the Acquisition Deal
With regard to Sportingbet's case, Ladbrokes' CEO, Glynn, stated that the structure was not something that could be agreed on as it was putting the shareholders of the company beyond a reasonable level of risks. Glynn, however, did not rule out the possibilities of such deals in future. The spokesperson for Onlinecasinorealmoney.com said in this regard that Ladbrokes was able to analyze the situation efficiently, having learnt from its past experiences.
Ladbrokes faced a similar situation before, when it was planning to buy 888 Holdings. The risks associated with the deal were more legal than financial. The firm made attempts to acquire the business early this year, but failed in its second attempt as well since an agreement could not be reached over the acquisition price.
Concerns of Analysts
With regard to the purchase deal of Sportingbet, analysts expressed concerns over the absence of a proper conclusion. It has been stated that the company enters into such deals several times but fails to close them. The possibility of problems from the side of the Turkish website was pointed out by Paul Leyland, an analyst, earlier this year.
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