Purple takeover talks confirmed

Seems to be Times on Saturday 5/1


The poor run of luck on acquisitions endured by Richard Glynn since he became chief executive of Ladbrokes almost three years ago might be about to change.
Having spent much of his first 18 months in the job in abortive talks to buy the bookmaker’s internet rivals 888 Holdings and Sportingbet, he is understood to be weeks away from agreeing an estimated £30 million deal to swallow ****, the betting exchange controlled by Dermot Desmond.
The two companies already have a commercial relationship, under which Ladbrokes uses the betting exchange to hedge the bets it takes in its shops and over the internet. **** is also said to provide its partner with market information on online trading.
Talks over an outright takeover are believed to have started almost a year ago but there had been rumours that a deal had fallen apart. One suggestion was that the two sides were divided over the inclusion of ****’s “white label” business, which runs exchange operations for smaller bookmakers.
However, analysts said last night that most of the big issues appeared to have been resolved and that the finishing line could be in sight. One said: “Word is we could see a deal at the end of this month or early next.”
Mr Glynn, a former chairman of Sporting Index, will be keen to conclude a deal with **** after spending months in ultimately unsuccessful talks to acquire 888, then Sportingbet. To make things worse, William Hill pounced on Sportingbet and is close to completing a deal to acquire its lucrative Australian and Spanish operations.
**** would be a much smaller transaction, but having a person-toperson betting exchange could help Ladbrokes to make more from its existing fixed-odds customers, many of whom already use **** or Betfair, which has just launched its own fixed-odds website.
One racing industry insider said: “**** is not going to transform Ladbrokes’ fortunes, but it would provide a useful extra service to existing punters. There could also be an opportunity to roll out **** into some international markets.”
Global Betting Exchange, which trades as ****, was set up by Mr Desmond 13 years ago in Dublin as a rival to Betfair, although it remains a minnow by comparison and is understood to be loss-making. It claims to offer odds up to 20 per cent better than a traditional bookmaker.
A deal over **** would be given added piquancy because Mr Desmond is also one of Ladbrokes’ biggest individual shareholders, with a stake estimated at between 2 per cent and 3 per cent.
Although Mr Glynn has overseen a revival in the bookmaker’s high street betting shops, his failure to snare either 888 or Sportingbet has left Ladbrokes trailing in the digital stakes behind William Hill, Bet365 and Paddy Power.Since the collapse of the Sportingbet talks in 2011, Ladbrokes has focused on developing an effective digital platform of its own, although the £50 million project has been hit by delays.

So what's everyone's thoughts on this?  Ladbrokes to fail miserably?  To not act as a direct competitor to Betfair?  A huge success leading to people move across?

We'll probably be sitting here, the same time next year, wondering what the hell they've done

Got this email from them:

Ladbrokes plc, one of the world’s leading betting and gaming companies, has today (24th January 2013) agreed to acquire the **** exchange business. The transaction is subject to certain conditions and is expected to complete in late February 2013.

What does this mean for you, our valued members?

Whilst ensuring that the integrity of the exchange is fully protected, we believe that combining the strengths of Ladbrokes with the expertise of **** will have a hugely positive impact on the betting experience for our customers.

On completion, Ladbrokes will work with **** to further enhance the competitiveness of the exchange, focusing initially on growing liquidity and event coverage, as well as expanding the range and depth of markets offered.

How to access the website and how to contact us will stay the same, and we will continue to offer our great low commission rates and promotions. We will of course keep you informed of when any key developments or enhancements that may affect you are likely to happen.

Our ultimate ambition is to bring all the great elements of Ladbrokes and **** together and create an unrivalled betting experience for all our members.

I hope they do. Ladcrooks are perfect IMO. They have the customer base and the cash to get this working well. It's far more likely they will succeed than betfair will at fixed odds betting!

So they do.  I deleted the email w/o reading the small print.  That's my afternoon sorted...

hmmm, purple home page is now a big purple screen advertising the takeover and asking for feedback and ideas to start the 'purple revolution'

i wonder if betfair will finally discover what competition means, the betfair share price certainly hasn't been happy about the news that their monopoly may be facing a competitor that actually has the funds and industry expertise to mount a proper challenge

I don't see all this being necessarily a successful move by Ladbrokes.
Where in their DNA do any of you see them as having the mgt. skills to run and grow a betting exchange operation ?.
It goes totally against the grain for them to even conceive of letting the punters take the lion's share of betting profits in return for a modest commission for just providing the platform for them to do so.

of course, its all a matter of implementation isn't it

but they have more chance of succeeding than anyone else who has tried so far, due to their funds and their existing industry knowledge and presence... and anything that gives betfair a bit of a boot up the @rse and reminds them what competition means has to be a good thing in my book

got that email too. nice of them to remember me, seeing as i haven't had a bet there for 6 years.

I suppose Lbrokes have a chain of shops they could use to encourage people to use the exchange who otherwise wouldn't. But what incentive do they have to do that? "Well sir our price for Man U is even money and on average we'll pocket 10% of your £10 stake over time.  But we'd prefer if you use our exchange where the price is 2.05 and we'll only get 3%".

They could start a big expensive advertising campaign along "Game On!" lines but they would have more chance of seeing that money again if they threw twenty pound notes out of their windows on a windy day.

Best chance would be to use the money to increase liquidity on the exchange themselves and have a small campaign aimed at people who already use the exchanges.

Yep, they'll use it to hedge their bets. I think they'll significantly increase liquidity through this method.

They'll also probably be a little more keen to ban/limit punters on their fixed odds site (I'm already limited and I'm sure many of you are) and suggest they use their exchange.

It's going to take quite some time before we notice much difference but it's certainly worth the time emailing them with what you want.

My feeling is that they want an exchange 1) to manage their SP liabilities, creating a market if necessary that suits their own book; and 2) to put pressure on the existing mechanism that returns a starting price.

Otherwise for the horses there doesn't seem much in it for them.

The people they want to take aim at w/ the purchase may be more their High st rivals than bf.