Breaking pre-market news on Friday,
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Ladbrokes, the UK bookmaker, will on Tuesday announce it is seeking a new chief executive after Chris Bell decided he would step down this summer. Bell’s decision will come as a surprise to the leisure industry, although several analysts have been notably more favourable towards Ladbrokes’ key rival, William Hill. The vacancy comes eight months after Peter Erskine, former chairman and CEO of O2, took over as chairman. Insiders said Bell had raised the subject of his succession shortly after Erskine took the chairmanship
The results of the latest MSCI reshuffle are out and they are already having an impact on stock prices.
As was widely rumoured, Ladbrokes has been removed from the MSCI World index, along with upmarket housebuilder Berkeley. Traders say this will trigger selling equivalent to 4.6 days average trading volume in Ladbrokes and 10 days in Berkeley. Read more
A collapse in Q3 profits combined with receding prospects of renewing lending facilities on keen terms prompted UK bookmaker Ladbrokes to launch a heavily discounted £275m cash call. Chris Bell, chief executive, said a more difficult trading environment among other issues meant it would be “prudent” for Ladbrokes to reduce its £962m debt pile ahead of refinancing talks next year with the group’s lenders at RBS and Deutsche Bank.
Markit’s Gavan Nolan wrote this CDS report
European credit indices resumed their rally after yesterday’s brief hiatus. But the spread tightening was modest compared to movements earlier this week, and the rally in both credit and equity markets lost momentum in the afternoon. The Markit iTraxx Europe index was trading around 92bp, marginally tighter than yesterday’s close. The Markit iTraxx HiVol index was stronger at 155bp, around 2.5bp tighter, while the Markit iTraxx Crossover was 2.5bp tighter at 568bp.
US aluminium company Alcoa provided the impetus for the rally, which was more pronounced among single names. The firm announced a surprise profit after the close yesterday, giving investors hope that the third-quarter earnings season will support current valuations. Unsurprisingly, mining credits led the market tighter, with Xstrata and Anglo American among the best performers. Other cyclical credits, such as autos and retail, also enjoyed strong sessions. Read more
Ladbrokes is set to become the latest company in the UK leisure sector to tap shareholders for cash with the launch of a £300m rights issue on Thursday. The leading UK bookmaker was on Wednesday night finalising details of the cash call, which is expected to be priced at a 35-40% discount to Wednesday’s closing price of 181p. The move comes just seven months after rival William Hill launched a £350m rights issue and follows a spate of fundraising in the pub sector.
Rumours had been circulating in the late London afternoon, but Neil Hume and other FT colleagues are now pretty sure that we can expect a £300m rights issue from Ladbrokes on Wednesday morning.
Joe Lewis, the Bahamas-based British billionaire who recently paid $860m for a 7% stake in Bear Stearns, is the mystery buyer behind a near-7% stake in Ladbrokes, the UK’s biggest bookmaker, reports The Times. Speculation about the identity of the buyer was triggered by Citigroup’s disclosure that it was holding shares as “contracts for difference” on behalf of one of its clients.
Ladbrokes, the leading British bookmaker, has ditched plans to break into the UK casino market in a blow for government plans to issue 16 new casino licenes to local authorities. James Purnell, the UK’s culture minister, is expected to announce in the next few weeks the formal burial of the proposed supercasino in Manchester, north-west England. But he will give the go-ahead for the eight large and eight small casinos that remain from the wreckage of the government’s much-derided casino expansion policy. Ladbrokes, however, will not be among the bidders to run them, and its decision raises doubts about whether any other leading gaming operator will bid for the new casinos.
Betting on horseracing has been in decline for the past couple of years, Ladbrokes’ chief executive said on Thursday, as poor over-the-counter sales prompted a 9.4% slide in the bookmaker’s share price. Chris Bell said the company’s shift towards a younger football-loving customer reflected waning interest in horseracing bets. Ladbrokes shares suffered one of their worst one-day falls since its separation from Hilton after a trading update revealed a 5% drop in over-the-counter sales, which were affected by race meeting cancellations and winning runs from the English and Scottish Premier League’s most heavily backed clubs.
The upbeat mood in the European credit derivatives markets quickly disappeared on Thursday morning, with indices moving slightly wider from opening levels.
The iTraxx Crossover index of junk-rated credits opened tighter at 195.5 basis points, but moved to 197bp by late morning, meaning that it costs €197,000 a year to insure €10m of a basket of junk names over five years. Read more
Talks went on for a while — the thick end of six months, in fact. But a statement from online gambling group 888 Holdings on Monday said itself and Ladbrokes had “amicably agreed” to discontinue takeover discussions. Ladbrokes put its own statement out, confirming from its side that the “parties have amicably agreed to discontinue talks.”
Clearly, there is relief on both sides. Read more
Just ahead of this weekend’s Grand National steeplechase, a group backed by leading racecourses including Ascot, Aintree and Newmarket has complained to competition authorities about a “stranglehold” on live horseracing coverage in the betting shops of leading bookmakers. Their complaint could prompt an investigation by the Office of Fair Trading into alleged anti-competitive behaviour by Ladbrokes and William Hill, the UK’s largest bookmakers. The racecourses are themselves shareholders in a new racing television feed.
The two remaining pools businesses in the UK are set to become one. Sportech, owner of Littlewoods pools, announced it was in exclusive talks with Ladbrokes to buy its Vernons Pools business. Pools business has suffered from competition from the National Lottery and other gaming products. But in spite of a slump in the number of people playing football pools, hundreds of thousands of people still do. Meanwhile, operators have tried to migrate players to the internet.