Ladbrokes Reworks 888 Holdings Acquisition to Shield Against U.S. Regulation

January 21 2007, Haley Hintze

The long-rumored acquisition by British gaming giant Ladbrokes of 888 Holdings Plc, the parent company of Pacific Poker, has experienced another wrinkle. According to several British websites, the acquisition is being reworked to shield Ladbrokes from potential U.S. regulatory fallout.

The 888 Holdings buyout has been part of a troika of major site acquisitions or mergers always just about to be announced, none of which have yet occurred. This deal was reportedly delayed while Ladbrokes searched for ways to stay legal according to British stock-market regulations. 888 Holdings has long been seen as a natural fit to Ladbrokes' own market gaps and plans for expansion, and the recent stories were the first to outline the modified Laddies plan.

According to these reports, Ladbrokes will strip out the major 888 Holdings assets, including the websites, customer databases, and other intellectual property. 888 would still remain in place as a company, presumably with some functions and legal responsibilities, though the major assets --- and the profits derived from them --- would transfer to Ladbrokes control. 888 Holdings boasts a strong presence in several markets where Ladbrokes itself is weak or nonexistent, the primary reason the deal was a natural fit. The details of the modified acquisition have not yet been made public, though the legal technicalities wrestled with by Ladbrokes' corporate counsel were reported to be the cause of the two months' delay from the time the pending deal was first reported.

If it goes through as planned, the total value of the 888 Holdings acquisition is approximately £440 million, or about $860 million in U.S. dollars. Ladbrokes' stock value experienced a brief jump following the initial report before settling back to its previous level, with investors perhaps reserving judgment until more details of the Ladbrokes plan come into public view.

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