So as rumoured for a while, Ladbrokes have finally acquired the lemon, sorry, purple-coloured betting exchange, Betdaq. For a mind-boggling €30m as 'initial consideration'. That's an even more ridiculous price than Fernando Torres for £50m, or any English player Liverpool have purchased in recent seasons!
As I've written previously there are no logical business reasons for this acquisition.
from Nov 29, 2012
The Racing Post reported this week that Ladbrokes are nearing a decision to acquire Betdaq. This baffles me, it really does. Betdaq are a complete and utter lemon. Their only rival in the market has kicked so many own goals over the years with the premium charge, followed by an increase in the premium charge, cost of API and data use, customer service standards which have fallen faster than Facebook share value, site crashes and various other faults. So many pissed off Betfair customers, yet Betdaq are still tailed off with a lap to go. Around the world, Betfair is losing favour. Across Europe, they are being kicked out of countries on a regular basis. Growth for the exchange just isn't there, hence they've had to push hard into other products - casino, arcade, sportsbook etc. Ladbrokes online division continues to spend vast sums of money for poor return on investment. So now they want to purchase Betdaq to fix that, when the exchange honeymoon period is well and truly over? You couldn't give the purple mob away. As I said to a mate on Twitter the other day - if you offered them a carton of Foster's for the business, you'd expect change. So many poor decisions made there over the years, they've blown their chance to be a real player in the market.
ADDENDUM - 30/11/12 - Betdaq have started contacting Australian clients to notify them their accounts will be closed. This either means Betdaq are intending to gain an Australian licence and wish to obey local laws, or, more likely, Ladbrokes, as a PLC, do not wish to break any local Australian laws - they have already closed all their Australian-registered accounts. Sources tell me Danish clients of Betdaq have received a similar email recently.
There can only be one real reason for this - a favour to their biggest individual shareholder Dermot Desmond, who owned Betdaq as well. €30m is massive overs for Betdaq, but keeping Dermot happy in the long run might be the better long-term strategy.
To those in high places with the 'Magic Sign', feel free to prove me wrong over the next couple of years ...
From the Racing Post:
The acquisition is expected to be completed late next month, and Glynn said: "The Betdaq exchange is a well-regarded and well invested business and a close strategic fit for Ladbrokes.
"Whilst the main focus of our digital growth strategy continues to progress well, this bolt on acquisition provides us with an exciting opportunity to grow our share of wallet through the creation of a differentiated and comprehensive sports betting proposition for customers and also supports our drive for improved liability management."
Well-regarded? By whom? They've been around for several years and have trod water for the majority of that. If their ambition has been to see off WBX and iBetX, then fair enough.
Well invested? By that does he mean it had been flush with cash or carefully managed not to wilfully waste it chasing Betfair when they weren't able to keep up? Or is it just Richard Glynn trying to claim victory in finally landing an acquisition after mainly aborted/failed attempts?