Ladbrokes in negotiations to buy Desmond's Betdaq
FINANCIER Dermot Desmond could be in for another big payday after UK gambling chain Ladbrokes confirmed it's in discussions to buy his Betdaq spread betting firm.
Rumours of an acquisition of the Irish betting company have circulated for the past year. It was reported last summer that Ladbrokes was eyeing Betdaq, which Mr Desmond founded in 2000, and might table a £50m (€61m) offer.
Latest speculation suggests that Ladbrokes might be lining up a £30m (€37m) bid.
Ladbrokes and Betdaq already have a commercial relationship. Ladbrokes has used Betdaq's pricing and trading technology as it seeks to revamp its online offering. Last summer Ladbrokes said it was interested in "deepening" its relationship with Betdaq.
"We are on a programme to improve our technology, and that could make it useful to us. I won't comment on whether we would buy it, but it would be useful to us, and you can draw your own conclusions," said a spokesman at the time.
Yesterday, Ladbrokes, in which Mr Desmond holds a small stake, confirmed it's interested in buying IFSC-headquartered Betdaq.
"Ladbrokes enjoys a close commercial cooperation with Betdaq and can confirm discussions regarding a potential future acquisition," it said
"Negotiations are ongoing, though at this stage there is no certainty that an agreement will be reached.''
As a spread betting firm, Betdaq doesn't offer fixed odds bets. Instead its customers bet against one another. They can reap huge gains if they bet accurately, but can lose much more than their original stake if they call the bet wrong.
Ladbrokes has had previous takeover talks with gambling firms 888 Holdings and Sportingbet as it sought to beef up its online offering. Last month, William Hill agreed to pay £485m (€595m) for Sportingbet, in conjunction with GVC Holdings.
In the first six months of 2012, Ladbrokes said operating profit at its digital arm plunged nearly 50pc to £15m, as a result of expansion costs and worse than anticipated margins.
Betdaq is an unlimited company and so does not have to file public accounts. Its chief executive is Brian O'Sullivan, who has been a director at Mr Desmond's International Investment and Underwriting vehicle since 1996.
Mr Desmond invested about €6m initially in Betdaq but would have stumped up further cash since then.