888 chief predicts merger talks
888 chief executive Gigi Levy has exclusively revealed to eGR that the company is "highly likely" to enter into merger discussions.
Listed UK gaming company 888 is “highly likely” to enter into merger discussions with interested parties in the next six months as the egaming market continues to consolidate following last week’s Bwin/PartyGaming tie-up, its CEO has exclusively revealed to eGR.
Gigi Levy, announcing the company’s second quarter results this morning, said there was a “very high likelihood” a merger would take place and that he saw “the advantages of scale” in the light of the industry’s two largest gaming companies consolidating. Levy said he did not yet know which company or companies 888 Holdings would potentially merge with, if it decided to do so, but did not rule out a deal with listed rival Ladbrokes.
Levy, however, clarified that the Bwin/PartyGaming deal would not alter 888’s current marketing strategy. “I think that the first thing to remember is that the consolidated Party-Bwin, when the transaction is completed, will represent less than 10% of the market.
“We are not talking about someone controlling 50% of the market, giving us no chance to compete. We are talking about an entity which is significantly larger than us, but still is less than 10% of a very fragmented market. In that regard, I don’t see us changing anything in our strategy because of that,” he added.
888’s second-quarter results remained stagnant in comparison with the same period last year with Q2 operating income at $61m, the same as Q2 2009. The majority of verticals including poker were down, although bingo was up 372% from Q2 2009 to US$13 million following the company’s acquisition of Wink Bingo in December last year.
Dragonfish, 888’s business-to-business (b2b) arm which had previously been the company’s star performer in 2009, was down 24% to US$10m from the same quarter last year.
The b2b division recently saw the departure of its chief executive, Gabi Campos, in June. On 20 July eGR exclusively revealed Campos had been appointed PokerStars first ever chief executive. Levy told eGR that Dragonfish had “not grown as dramatically as we wanted” and that part of the reason it has new management in place at Dragonfish was “because of that”.