Ladbrokes has confirmed it is in talks to buy Europe’s second-largest betting exchange, Betdaq.
The statement issued by the UK bookmaker follows a report in The Times over the weekend that it was weeks away from agreeing a £30m deal to acquire the Dublin-based betting exchange business from current owner Dermot Desmond.
Betdaq already provides pricing services to Ladbrokes, which has has been regularly linked with takeover approaches for Betdaq since 2006, most recently in July of last year.
Betdaq was established back in 2000 but has struggled to build liquidity in the wake of market leader Betfair, blamed by outgoing MD Rob Hartnett in 2005 on its early focus on the high-roller end of the market and technology that initially lagged Betfair’s.
Owner Desmond has publicly admitted the business is costly to run. Profits are also understood to have remained elusive.
Betdaq claims to handle more than £50m of bets every week. Parent company Global Betting Exchange also operates a white-label sportsbook business running off Betdaq, which powers the sports betting offered by gaming operators 32Red and PKR.
Ladbrokes CEO Richard Glynn (pictured) has been eager to mount a revival of the company’s online business through acquisition since his appointment in April 2010. He however turned his back on a deal for 888 after failing to agree on price and walked away from a mooted £470m acquisition of Sportingbet due to regulatory concerns over the latter’s Turkish-language Superbahis business, since sold to GVC Holdings.
Today’s confirmation of talks with Betdaq are unlikely to do harm to Glynn’s prospects of landing £1m of a potential £12m bonus written into his contract, due to vest if the shares stay above £2 for 30 days after breaching this threshold just after Christmas.
Article written by Stephen Carter