The shares of 888 Holdings Plc. jumped by nearly 20% in value on Monday after it confirmed that it is in talks with leading British bookmaker Ladbrokes Plc. 888 Holding “is in the early stages of discussions in respect of a possible transaction involving Ladbrokes”, the company said in a statement. Cautioning investors from jumping to any conclusions, it said: “at this stage there can be no certainty that these discussions will result in a formal offer being made for the company”.
Ladbrokes also confirmed the news saying that negotiations were at a very “preliminary stage”. Ladbrokes also offered similar advice to its investors saying “There can be no certainty that these discussions will ultimately lead to an offer for 888 being made, nor as to the terms of any such offer”.
Shares of 888 rose to 58p on Monday, a jump of 18% over the last closing price. The market capitalization of 888 holding after today’s jump is estimated at £170 million. Ladbroke slipped by 0.7 percent to 126.6p.
Ladbrokes is one of UK’s biggest bookmakers with 2,220 shops and a strong online presence. 888 holding only operate online gaming portals.
The two companies had engaged in similar talks four years ago but abandoned them amid fears that the US justice department may go after 888 holdings for dealing with US gamblers on its internet gaming portal.
The Austria based gaming company Bwin, which announced its merger with PartyGaming in July and US based Caesars Entertainment have been named as potential bidders for 888 holding on previous occasions.
888 holding reported sales of £84.8 million ($130 million) for the first six months of 2010, a growth of 10.5 percent over the same period last year, primarily due to the Football World Cup 2010. It has since been considered as a potential take-over candidate by different suitors.