Recent speculation in Britain about a possible takeover of 888.com by Ladbrokes seems to be gearing up a notch, according to weekend media reports regarding the famous British bookie’s purported takeover strategy.

According to the reports, Ladbrokes might be able to avoid potential legal action in the US if they follow a specially tailored GBP 440 million plan for the takeover of 888.com.  The strategy outlines an approach that would strip out most of 888.com’s assets, as opposed to acquiring the group as a whole.

One of the media articles quoted a lawyer as saying, "If a company faces criminal liabilities in the US, selling up is not the end of it. The new owner will face the same criminal proceedings. But this new structure could give Ladbrokes an interesting defense by separating the corporate identities of the two companies." 

888.com, along with many other online gaming firms, were forced to pull out of the US public sector after the US government passed law that prohibited financial transactions between US residents and online gambling operations.  Hence, 888.com was ripe for takeover.  For Ladbrokes, the opportunity may be too hard to resist, as one analyst pointed out that the company can “… have their cake and eat it too.”

Takeover talks are not proceeding as quickly as one might have expected, however, because non-executive members of the Ladbrokes board of directors are insisting on scrutinizing every last legal detail of the deal.

All the talk of the takeover has, in the very least, had a positive effect on Ladbrokes.  Shares in the company closed at a record on high Friday.

Posted on: January 31, 2007

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