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FTSE 350: Gambling sector has deals to digest

A slew of mergers has left behind some potential wallflowers, who will need to be fleet of foot to prosper without a dance partner
January 29, 2016

After announcing your engagement come the challenges of matrimony, and after a particularly fervent flow of dealmaking for the gamblers in 2015 there is a lot of settling in to do.

The most significant of the tie-ups last year was arguably that of Paddy Power (PAP) and Betfair (BET), with the Irish group attracted to the online prowess of its target. The company had joked in a summertime tweet that the companies could merge under the name Betty Power. Just one month later, this tongue-in-cheek response to news of Ladbrokes' (LAD) approach for Gala Coral came true. The first of these deals looks like it will be completed fairly quickly, but Ladbrokes is likely to need to sell off some of its estate to satisfy competition authorities.

There was also the high-stakes tussle for Bwin.Party Digital Entertainment (BPTY) between 888 Holdings (888) and currently Aim-traded GVC Holdings (GVC). In the end, the latter rolled the dice one last time after Bwin's board had notionally accepted 888's offer and it came up trumps. The enlarged GVC/Bwin entity is set to list on the main market on 2 February and, all things being equal, is expected to be the highest yielding stock in the FTSE 250 - a key plank of our recent GVC tip.

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