Saturday 27 May 2017

Desmond linked with a €65m stake in bookies

Davy Private Clients build stake in €1.5bn Ladbrokes

Punter: Dermot Desmond
Punter: Dermot Desmond
Nick Webb

Nick Webb

BILLIONAIRE investor Dermot Desmond has been linked with a near 4 per cent stake in €1.5bn-valued British bookmaker Ladbrokes.

Last week, Ladbrokes chief executive Chris Bell stepped down after nine years at the helm. His departure came after investors expressed dissatisfaction with the company's management. It is thought Mr Desmond and other investors, including Davy Stockbrokers Private Clients and JP Morgan, had been particularly unhappy with the performance of the company. Sources close to the bookmaker indicated that Mr Bell had always planned to retire in his mid-50s.

Mr Desmond has long been linked with Ladbrokes. At one stage it was suggested that the bookie had been looking to buy the financier's stake in Chronicle Bookmakers but this was dismissed.

Mr Desmond's betting exchange Betdaq has also been subject to speculation regarding a tie-up with the British corporation. Last week, Ladbrokes said that it was unaware of Mr Desmond's stake, although market sources indicated that it may be held through a number of funds.

It has been suggested that Mr Desmond may hold up to 3.9 per cent of Ladbrokes, which could be worth close to €65m. Shares have risen nearly 20 per cent in the last three months.

Mr Desmond's associates, John Magnier and JP McManus, are also thought to have cast their eye over the FTSE-listed company, with strong suggestions that they had been trading shares in 2007. Sources have indicated that Davy stockbrokers' private clients own a 1 per cent stake in the bookmaker.

It is thought that investors in the bookmaker were furious at its heavily discounted €310m rights issue last October. The rights issue shocked the markets, especially as it came just two months after chief executive Chris Bell had indicated he was not seeking to raise money to cut the company's €1.1bn debt.

Mr Desmond's forays on to the stock market are hugely significant. Market sources have said that Mr Desmond may also have been active in buying ABN Amro shares, making a fortune during the €70bn takeover battle in 2007. He is also said to have traded in giant search engine Google's shares.

His IIU operation also invested in major corporate debt deals, including a $1.6bn Intel Junior Subordinated Convertible Debenture issued in 2007. The outfit invested in a $575m issue from US property firm Duke Realty and an $1.15bn loan note issue by the world's biggest gold-mining firm Newmount.

Mr Desmond's deals on the Irish stock market have become legendary for their contrarian stance and timing. Early last year, the Sunday Independent revealed that he had begun to buy shares in Irish banks when they were trading close to an all-time low. He bought almost 1 per cent of Bank of Ireland and a slightly smaller stake in AIB. Several months later, the billionaire sold making a massive profit.

Mr Desmond has also banked vast profits from the sale of a 22 per cent stake in Greencore in 2006, as well as from investments in Golden Vale and Baltimore Technologies. And he is a shareholder in travel software firm Datalex.

Mr Desmond has also a diverse bunch of investments ranging from a near 20 per cent stake in a diamond-mining project in Canada, held by Toronto-listed Mountain Province Diamond, as well as a 26 per cent in paypal rival Neovia. The businessman also held a 10 per cent chunk of Nasdaq-listed convict-tagging firm Remote MDX, before selling out for a huge profit.

Sunday Independent

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