Playtech reportedly made summer scoop for 888 acquisition

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Playtech has expressed interest in acquiring sportsbook and casino operator 888 over the summer to further its exposure as a B2C firm.

According to The Times newspaper in the UK, the supplier made an offer of 156p ($1.98) per share for the operator, which is live in the US via its Sports Illustrated sportsbook brand and in Ontario via its 888 brand. 

The offer, which was made in a written indicative approach, was worth approximately double 888’s current share price, which is around 70.6p ($0.9). It valued 888 at around ($760.5m), but was rejected out of hand as the 888 board felt it undervalued the business. 

During the last few years, 888 has embarked on an M&A spree of its own, notably acquiring the William Hill sportsbook brand for over $2bn last year, while it also owns Mr Green.

The Times further reports that Playtech was pondering a major shift in strategic approach as sources told the newspaper that Playtech was aiming to buy 888 to integrate into its own B2C operations, then sell off its core B2B business units. 

Playtech did not directly comment on the story but those “familiar with Playtech’s thinking” have stated that the B2B unit would be “hived off” into a new company. 

These revelations come after Playtech itself was subject to an acquisition interest. Aristocrat Gaming had made several offers to takeover Playtech, but the bid was subsequently rejected by shareholders before the firm bought NeoGames instead. 

Playtech has also confirmed interest in purchasing Italian operator Planetwin365, which would supplement its existing presence in the European nation. 

Meanwhile, 888 recently lost a big contract with the Delaware Lottery to be the exclusive online casino gaming supplier for the state corporation. After the initial 10-year period, the lottery opened up a new RfP to determine the next licensee instead of automatically renewing 888’s deal. The Delaware market accounted for around 10% of its online revenues in the US.

Instead the firm is targeting older bettors with a “longer lifetime value” through the Sports Illustrated brand. 

The group’s Chairman Lord Jonathan Mendelsohn commented earlier this year: “We’ve been pretty clear about what our US strategy has been and what we were planning to do, we’ve really emphasized that we’ve found a brand in order to be able to market to a very distinct customer to have a very good, strong niche position in a very large market that we’re focusing on using that brand of Sports Illustrated to go to this slightly older customer and one who has a longer lifetime value and that we’re really going to try and focus on markets where we have an igaming advantage as well.”