Ladbrokes tipped as favourite in the race for Sporting Index
September 15, 2005admin No Comments »LADBROKES, one of Britain’s biggest bookmakers, has emerged as a key contender to buy Sporting Index, the spread betting group, for up to £70 million.
Duke Street Capital, the private equity owner of Sporting Index, has whittled the auction down to a handful of bidders and set next week as the deadline by which they must table their second-round offers.
The shortlist is believed to comprise Ladbrokes, which is owned by Hilton Group, and two private equity firms. Bridgepoint is thought to be one of the contenders.
Duke Street, which is working with NM Rothschild, the investment bank, is expected to enter exclusive discussions with one party after next week’s updated offers. The originally mooted asking price was closer to £100 million.
Analysts said that Ladbrokes appeared to have the best chance of winning the auction. The company would have an advantage over private equity rivals by being able to cross-sell its own betting products to Sporting Index punters while offering Sporting Index to Ladbrokes customers.
There is also a historical link between the two companies in the figure of John Jarvis, Sporting Index’s chairman, who was once chairman of Hilton International, the hotel arm of Hilton Group. Mr Jarvis left Hilton to set up Jarvis Hotels in 1990.
Ladbrokes, which abandoned a spread-betting foray in the 1990s, recently teamed up with a rival firm, Cantor Index, to offer financial fixed-odds bets.
Duke Street backed the £53 million management buyout of Sporting Index in December 2002. The deal was led by Richard Glynn, the company’s chief executive.
Duke Street is also preparing to sell the Lil-lets feminine-care brand for about £100 million, after hiring Citigroup to conduct a “strategic review” of the business. A flotation or refinancing have not been ruled out as alternatives to a sale, however.
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