Investors place bets on spree of gambling deals

THE City was awash with rumours that another wave of consolidation could be heading for the UK’s gambling sector yesterday.

The FT reported that Isle of Man-based GVC Holdings, which owns Sportingbet and Foxy Bingo, recently tabled an offer of as much as £3.6bn for Ladbrokes Coral, with the aim of creating one of the world’s largest gambling firms.

The two businesses previously entered talks towards the end of last year as Ladbrokes was merging with Coral, but the deal ultimately fell apart.

The Mail understands the latest deal was spurned by Ladbrokes as a result of its concerns around GVC’s large revenue base in Turkey, which is heading towards a large regulatory crackdown.

Despite their failure, some feel the talks have fired the starting gun for more tie-ups among UK gambling firms as the industry prepares for the government’s upcoming – and potentially damning – sector review.

Last year’s wave of gambling mergers saw Ladbrokes and Coral agree a surprise £2bn merger, while Paddy Power and Betfair joined to form a FTSE giant worth around £8bn.

Ladbrokes Coral fell 0.2pc, or 0.2p, to 119.8p yesterday while GVC Holdings was down 0.1pc, or 0.5p, to 750.5p.

But the pair’s peers advanced, with William Hill up 1.9pc, or 4.5p, to 244.5p, Paddy Power Betfair up 0.6pc, or 40p, to 7195p, and Playtech ahead 0.1pc, or 1p, to 989.5p.

Travel group Hostelworld soared yesterday after a jump in mobile phone users and growing numbers of tourists flocking to Asia helped to push revenues 16pc higher to £42.7m in the first half of the year.

The company, which features Charlie Sheen in its adverts, saw total bookings rise 11pc to 3.9m over the period, with trips sorted by mobile phones now representing 50pc of all bookings, up from 43pc in H1 2016.

Revenues were especially strong in the Asia, Africa and Oceania regions, jumping to £8.7m from £6.9m. Shares rose 15.3pc, or 44.5p, to 335p.

The FTSE 100 rose 0.9pc, or 62.9, to 7381.7 despite a spectacular nosedive at sub-prime lender

Provident Financial, following a second profit warning.

The distraction of Provident – whose shares plunged 66.2pc or 1155.5p to 589.5p – even allowed education publisher Pearson to sneak away unscathed from another damning ‘sell’ note, this time from analysts at Berenberg.

Berenberg said it is currently very hard to tell whether Pearson will be able to successfully address problems in the US higher education market. The business, which has issued five profit warnings in four years, has struggled to compete against online competition and growing numbers of US students choosing to rent textbooks rather than buying them.

Although Pearson soared when it floated the idea of selling its US business, Berenberg said such costcutting measures will make it harder to hire talent. Regardless, shares rose 0.4pc, or 2.5p, to 621.5p.

Edinburgh-based Cairn Energy started generating revenue again in the first half of 2017 after Kraken, a large North Sea development which it owns a stake in, produced its first oil.

The oil and gas explorer made revenues of £8.4m in the first half of the year, compared to no revenues in the same period the year before.

Turnover was also boosted by royalties paid to the firm from oil giant PetroChina in July, which arose from producing fields in Mongolia.

Cairn shares rose 3.6pc, or 6.3p, to 180.2p.