Ladbrokes to Demerge from Hilton? – October 15th, 2005
It is reported today in the UK newspaper The Times that Hilton are considering selling off Ladbrokes, which will allow the UK Gambling Heavyweight and world’s largest bookmaker to enter the American Online Casino and Poker Markets.
Ladbrokes which operates the majority of it’s eGaming Business offshore in Gibraltar, has been unable to target the American Market, due to it’s ties with Hilton, who have business interests in the United States.
If the speculated demerger occurs, this will allow Ladbrokes as a separate entity with no business interests in North America to be able to target the Lucrative US Online Gaming Market. Ladbrokes who run Europe’s Largest and most popular Poker Room in Ladbrokes Poker, which is not part of any poker network, would be able to capitalise on their world leading brand and poker product, attracting many thousands of US Poker Players onto their site.
In addition Ladbrokes is understood to be weighing up a bid for Rank Group, the £2.5 billion owner of Mecca Bingo and Grosvenor Casinos, once its proposed demerger from Hilton’s hotel arm is completed.
The report in The Times also goes on to state:
The speculation comes after an announcement yesterday that Hilton Group, which owns the rights to the Hilton name outside the United States, is in talks to sell its hotel business to America’s Hilton Hotels Corporation (HHC) for an estimated £3.6 billion. In a statement, Hilton Group said: “The board confirms that it has received an indicative offer from Hilton Hotels Corporation, which it is currently evaluating. Discussions are ongoing and are subject to the resolution of a number of issues.”
The deal, which would reunify the Hilton brand after a 41-year separation, is expected to take several weeks of due diligence as the two sides work through the complexities of stitching the two businesses back together.
Shares in Hilton Group jumped by 40¾p to 345½p as the market welcomed the prospect of the return of a significant proportion of the proceeds to shareholders, who would retain ownership of a quoted Ladbrokes.
The recent acquisition of Coral Eurobet by Gala, the casino and bingo operator, has created a gambling behemoth combining betting shops, bingo clubs and casinos, and buying Rank would turn Ladbrokes into a very similar company. Shares in Rank climbed 5¼p to 294p yesterday.
