LADBROKES, the betting shop chain, is expecting a big payout as punters gamble £1bn on this year's World Cup in Germany and the firm plans further backing for its online poker game.
The huge wager by football fans will be welcome news for investors in the chain which will emerge from the shadow of parent group Hilton which is selling its hotels to Hilton Hotels of the US.
Shareholders in the UK company will receive one Ladbr
okes share for every Hilton share and cash from the sale of the hotels.
Private equity groups including CVC have been circling Ladbrokes, and an offer of £3.7bn is believed to have been turned down by Hilton this month. Chief executive Chris Bell will this week tell shareholders that the company has growth prospects as an independent quoted company.
The group, which operates more than 2,000 shops across the UK, is expected to benefit from bets placed on the World Cup, longer opening hours, more welcoming smoke-free interiors and new betting lines.
Among the innovations being pushed through by Ladbrokes are in-store coffee shops, French pools and betting during games. Ladbrokes has also hired advertising agency Leo Burnett to raise its profile in the booming online poker sector.
JP Morgan, the broker, last week upped its recommendation on Hilton Group from neutral to overweight. Tejpal Dhami, a JP Morgan analyst, said the company was likely to avoid risky bets such as acquiring an online rival. He said: "We are confident that Ladbrokes is focused on driving organic growth in its core business instead of pursuing an acquisitive growth strategy. We see the organic pursuit of casino opportunities as a sensible move."
Hilton Group is expected to reveal pre-tax profits on Thursday of £402m in 2005, up 7% on the year before, on turnover of £13.3bn, up 12%.
Howard Friedman, the president of Hilton's UK hotel division, said last year that the company could open dozens of new hotels under the mid-market Scandic brand, which is presently concentrated in Scandinavia.
A Hilton source said the merger of Hilton with its US namesake meant US brands such as Embassy Suites, Double Tree, and Hilton Garden Inn could be rolled out in the UK and other countries which were previously the territory of Hilton Group.
The full article contains 416 words and appears in Scotland On Sunday newspaper.
