Investors bet on Ladbrokes offer
BUYERS of Ladbrokes were suddenly back in the saddle as revived bid rumours made their way across the Irish Sea.
Shares of Britain’s second-biggest bookmaker galloped 2.2p ahead to 122.3p on hot gossip that Dublin-based betting and gaming company Paddy Power, €0.3 easier at €79.70, could be lining up a £1.6bn or 175p a share cash offer before Laddies’ new boss Jim Mullen gets the chance to transform the group’s digital and online operations.
Mullen used to run the online unit at rival William Hill (1p dearer at 422p) before being poached by Ladbrokes in November to replace the outgoing Richard Glynn.
Eyebrows were raised in dealing rooms when 25.5m Ladbrokes shares recently changed hands. It increased speculation that a predator, possibly a cash-rich private equity player or Paddy Power, was stake building prior to launching a full-scale bid.
Paddy Power’s name is forever being mentioned in the same breath as Ladbrokes, as it is said to be keen on bolting on Ladbrokes’ underperforming online operation to its own highly successful offering, which includes sportsbet.com and its telephone business Dial-a-bet. Broker UBS reckons Ladbrokes’ online business could be worth as much as £700m in 2016.
Saturday sees the running of the Investec Epsom Derby. The greatest flat race in the world could yet play second fiddle to a mega multi-billion-pound bookmaker merger should the rumours prove correct.
Bwin.Party Digital Entertainment edged up 0.2p to 107.2p as dealers awaited further takeover developments. The online gaming firm is at the centre of a takeover battle between 888 Holdings, 2.25p better at 170p, and a partnership between GVC and Canada’s Amaya. Bwin said on May 21 that it expects in the coming weeks to ‘reach a conclusion’ as discussions with suitors enter a new stage.
Shrugging off fears of a Greek default, the Footsie rallied 22.19 points to 6950.46. Fund managers must be fed up with the monotony of the Greece situation and yesterday took a more optimistic view ahead of the big event of the week, tomorrow’s US jobs report.
Wall Street did London a favour by rising 70 points at the outset, after data pointed to a rebound in the US economy. The US trade deficit narrowed in April, while private employers increased hiring in May.
Irish construction giant CRH, which is buying assets from rivals Holcim and Lafarge, jumped 61p to 1853p.
Reflecting relief on avoiding relegation from the Footsie elite and a rare increase in sales, Wm Morrison Supermarkets put on 5.6p to 178.1p. Rival J. Sainsbury, in which the Qataris still sit on 26pc, rose 4.7p to 249.8p.
British Airways owner International Consolidated Airlines drifted 11.5p lower to 543.5p. May 2015 traffic rose 5.7pc with group premium traffic up 4.6pc compared to 2014.
Space provider Workspace was top FTSE 250 performer with a gain of 60p to 980p following better-than-expected annual results. Pre-tax profits rose 43pc to £360m and the final dividend is hiked 15pc to 8.15p.
Liberum lifted its price target to £11 from 836p.
Social housing and domiciliary care group Mears eased 0.25p to 428.25p after the AGM confirmed that trading is in line with expectations. This week’s acquisition of Care UK’s domiciliary care activities for £9m cash creates the second-largest care provider in the UK after Saga’s Allied Healthcare business. Peel Hunt’s target price is 550p.
Buying on the back of an in-line third quarter trading update helped books, newspaper and stationery retailer group WH Smith advance 34p to 1572p.
The board remains confident about fullyear results. Investec is bullish following good momentum in its travel business.
Residential and urban regeneration group Sigma Capital rose 7.5p to 77.5p after expanding its portfolio agreement with Gatehouse Bank to build 10,000 new rental homes over the next five years. Under the new agreement, its private rented sector portfolio will be worth £1bn.
Ariana Resources, the Anglo-Turkish gold explorer, gained 0.23p to 1.08p after having its Red Rabbit Gold Project for a forestry permit approved.
The group will only receive the permit if it pays statutory fees within the next three months, but has already secured a £21.5m construction finance facility. Broker SP Angel upgraded to hold from sell.
Hydro International added 2p to 140p after being selected to provide storm water management products in Qatar.
Stakes changing hands left IMImobile 8p up at 132.5p. Private equity groups Sequoia Capital India Investment Holdings and First Mark sold their shareholdings of 9.7pc and 9.6pc in the mobile software provider. It enabled Toscafund and Liontrust UK Smaller Companies Fund to top up their holdings.