January 07, 2013

Ladbrokes in talks to buy Betdaq betting exchange

Irish businessman Dermot Desmond could be in line for a windfall after Ladbrokes confirmed it was in discussions to buy his betting exchange.

It is thought the bookmaker could be just weeks away from paying an estimated £30m for the Global Betting Exchange, which trades as Betdaq.

Ladbrokes said on Monday: "[We] enjoy a close commercial co-operation with Betdaq and can confirm discussions regarding a potential future acquisition. Negotiations are ongoing, though at this stage there is no certainty that an agreement will be reached."

Desmond set up the exchange 13 years ago in Dublin as a rival to Betfair, but it has failed to grab a significant portion of the market and is thought to be loss-making. Betfair, meanwhile, continues to dominate, with an estimated 90% share of the exchange market, which operates more like a trading platform on which punters can lay bets against one another.

The Ladbrokes chief executive ,Richard Glynn, has been dogged by failed acquisitions since he took the helm of the group almost three years ago, holding talks with 888 and Sportingbet that ultimately collapsed. But analysts say this deal is more likely to go ahead, as Desmond is also one of Ladbrokes' biggest shareholders, with an estimated stake of between 2% and 3% in the bookie.

It is thought Ladbrokes is keen to offer customers, who use both betting exchanges as well as fixed-odds services, a one-stop shop.

Simon French of Panmure Gordon said: "Acquiring Betdaq would provide Ladbrokes with broader product reach and may reduce leakage of certain customers to Betfair but significant investment in product and marketing would likely be required for Betdaq to become a material profit contributor to Ladbrokes."

Desmond retains a hold rating on the shares with a target price of 202p.

Ladbrokes shares ticked up 0.5% in early trade to 203p.

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