Shares in Ukbetting, the online gaming firm, jumped 11 per cent yesterday after it revealed it had received a takeover approach.
It is understood the suitor is a large internet gaming group seeking to boost its customer numbers in the wake of the crackdown on internet gambling by the US authorities.
Other rumours included a large media group, with one naming News Corp, Rupert Murdoch's media group, as a possible bidder. Analysts said it could be the first move in a wave of consolidation that is expected to engulf the European market.
Ukbetting is seen as a prime target as it does not have exposure to the US market. It is also seen as a different type of business from most of its rivals as it boasts a revenue stream from advertising on its content sites as well as bet revenues. The company owns and operates 10 sports content sites, such as sportinglife.com, and planet-F1.com, as well as three sites that compare odds and three actual gaming sites. One industry expert said: "Given that they have 9 million content users, that's quite attractive to a company that has lost between 50 and 75 per cent of its revenues to get new customers quickly."
Shares in the company, which bought the Ritz Hotel's internet casino last week, closed up 6p at 61.5p. Traders said a bid could come in at 70p, valuing the company at more than £90m.
Shares in a host of online gaming sites such as PartyGaming and Sportingbet plunged this week after Congress unexpectedly passed laws at the weekend to close down online gambling in the US. Sources played down a bid from PartyGaming, despite the revelation that it had pulled out of a proposed £200m all-cash takeover of its rival Gamesys.
It is understood that PartyGaming was forced to look at the offer again after the US legal moves forced financiers to tear up all previous valuation models. A source familiar with the situation confirmed that PartyGaming was considering a renewed offer with a mixture of cash and other financial instruments.
Neither PartyGaming nor Ukbetting would comment on their respective situations.Reuse content