7 PERCENT MAN

22 February 2008

UK billionaire building a stake in Ladbrokes


A report in the UK newspaper The Times this week reveals that billionaire businessman Joe Lewis has been "quietely building" a 7 percent stake in Britain's biggest bookie, Ladbrokes.

The "mystery buyer" is based in the Bahamas but has homes around the world. The revelation ends weeks of City speculation as to who was really buying up chunks of Ladbrokes stock after Citigroup disclosed in a series of statements that it was holding shares as “contracts for difference” on behalf of one of its clients.

Lewis apparently believes Ladbrokes shares are undervalued and he is thought to be keen to acquire more blocks if and when they become available, the Times reports.

The British-born investor hit the headlines recently when he paid $860 million (GBP 440 million) for a 7 percent stake in Bear Stearns, the American investment bank, which has been hit hard by the US sub-prime mortgage meltdown. He has since increased his holding to 8 percent. He also owns a stake in Tottenham Hotspur Football Club and has in the past tried to acquire Victor Chandler, the betting group.

Sources told The Times that Lewis had been quietly buying up shares in Ladbrokes for several months and that he raised his stake again last week. His holding in the bookie is now thought to be worth about GBP 300 million. Lewis is known to be close to several of Ladbrokes's other investors, including John Magnier and J.P. McManus, the Irish racing magnates who are believed to own a stake of just under 3 percent.

Any bid could also involve a tie-up with Apax Partners, the British private equity group, which is known to have approached Ladbrokes in 2006 when it was demerged from Hilton Group.

Lewis, is also involved with Betdaq, the online betting exchange, and has recently been linked to stake-building at Rank Group plc, the embattled casino and bingo club operator where Malaysian investors have been buying stock recently (see previous InfoPowa reports).

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