Update: Ladbrokes and Sportingbet Mutually Terminate Negotiations

No agreement on acquisition/merger

In regard to the potential acquisition/merger of Sportingbet plc by Ladbrokes plc, an announcement came on Oct. 10 that the negotiations, which began in June 2011, have been terminated by both companies in an RNS statement made to the stock market.

In previous reports on the negotiations, it was specified that Ladbrokes had until October 17 to put a formal bid for Sportingbet on the table, but the companies instead decided to end discussions "as the parties were unable to agree either a suitable structure or one that delivered sufficient value to shareholders within a meaningful time-frame."

A comment arrived from Sportingbet plc CEO Andrew McIver, who said: "As stated in the Company's final results announcement last week, the Board of Sportingbet remains focused on its overall strategy of providing a first class sports betting product and of increasing its exposure to regulated markets. The Board remains highly confident of Sportingbet's prospects as an independent company."

According to McIver's Ladbrokes counterpart, Richard Glynn, "In August of last year we laid out a very clear organic strategy and investment programme for the reinvigoration of Ladbrokes. We were also clear on the intention to explore opportunities which enabled us to accelerate our progress that enhanced shareholder value and without exposure to non mitigatable regulatory liability.

"The potential benefits and risks associated with a combination with Sportingbet were clear to us from the outset and have been well covered by the market. Having completed our analysis we have been unable to agree a structure which delivers increased shareholder value within an acceptable regulatory environment. We have therefore agreed to end our discussions."

According to a Sportingbet plc spokesperson, the other negotiations, in which the company has been engaged with GVC Holdings plc regarding a possible acquisition of Sportingbet's Turkish operations, are progressing.

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