I have a long position in Sportingbet
(SBT, mkt cap £300m). I am long because I reckon it to be a good business, in a
growing market, ripe for consolidation. On the third point I note some
interesting activity announced this morning by Genting (GENT MK, mkt cap
MYR33.5bn), the enormous Malaysian gambling group.
Genting appears to have announced it's
looking to offload its stake in its Australian Casino business, Echo
Entertainment (EGP AU, mkt cap AUD3.4bn) for $160m. This may be important for
Sportingbet. Genting has been touted in the press as a potential suitor for
Sportingbet, see link. An argument against this has been that in the Australian
market, a company is apparently permitted to manage a land based casino or an
online casino but not both. This ignores the fact that for the moment
Sportingbet only does sports betting in Australia so land vs. online casino
gaming obstacle is currently moot. But there is undoubtedly ambition on the part
of Sportingbet. On today’s move, maybe Genting is freeing up a bit of pocket
money and getting its ducks in a row to ease any problems switching from land
to online gaming?
I would also add that the $160m really is pocket money to Genting; from what I can tell it's forecast to achieve c. £860m in free cash flow this year. Further, once one breaks ranks for Sportingbet, I reckon others follow.
Disclaimer: The information, discussions or topics referred
to on this blog should in no way be considered “advice” to buy or sell
anything. The information which may be referred to is freely available in the
public domain and where required the source of information is referenced to for
verification. While every effort has been made to ensure the veracity of any
information contained within this blog, the author accepts no responsibility
for the accuracy of any information contained within this blog or for the
sources of information which may be referred to. Readers are responsible for
their own actions and interpretation of the information contained within this
blog.
No comments:
Post a Comment