MARKET REPORT: Gambling bigwigs punt on William Hill owner

Shares in the owner of William Hill soared after former Ladbrokes bigwigs became its biggest shareholder.

Gambling group 888 rose 25.6 per cent, or 20.5p, to 100.5p – its highest since the end of January – as FS Gaming Investments took its stake to nearly 7 per cent.

US-based FS is an investment vehicle which includes industry veterans Kenny Alexander, Lee Feldman and Stephen Morana.

They all worked for Ladbrokes and Coral owner Entain.

The trio have teamed up with Shay Segev, who succeeded Alexander as Entain chief executive and ran the company until 2021.

All in: William Hill owner 888 rose 26.8% to 101.4p – its highest since the end of January – as FS Gaming Investments took its stake to nearly 7%.

He has now handed over his 2 per cent holding in 888 to FS, taking its holding from 4.6 per cent to 6.6 per cent.

That makes them the largest shareholder in 888, whose empire includes 1,350 William Hill bookies and brands such as SI Sportsbook and Mr Green. Feldman said: ‘This is an investment in a company that is undervalued.’

The move set tongues wagging in the industry over their intentions for 888, whose stock is down nearly 80 per cent since autumn 2021.

The company was left reeling by a record £19.8m fine from the Gambling Commission in March for ‘social responsibility and anti-money laundering failings’.

And it is still looking for a chief executive after Itai Pazner left in January amid problems with VIP accounts in the Middle East.

Peel Hunt said: ‘This well-informed group could contribute to finding a chief executive, accelerating the existing strategy and finding new directions for growth. 

A bid is possible and, if it triggered a refinancing, has the potential to create value by reducing the burden of the debt service cost.’

Stock Watch – IOG

IOG crashed 41.8 per cent, or 2.79p, to 3.91p after the offshore producer warned volatile gas prices were hurting it.

Earlier this year it said that the ‘evolution of gas prices’ was a ‘key risk’ that would affect its ability to continue as a going concern.

Gas prices stood at 126p per therm in mid-March but nearly halved by the first week of June.

As such, it is likely to breach at least one of the terms set by lenders who had provided a loan.

Victoria Scholar, head of investment at Interactive Investor, said: ‘This could mark the beginning of significant changes including the potential for a shake-up. 

Even after this week’s surge, shares in 888 have more than halved in value over a one-year period, in stark contrast to Flutter which is up by more than 70 per cent.’

Yesterday, 888 said: ‘We welcome the investment of FS Gaming which we believe reflects the significant value creation potential in our business.’

The FTSE 100 fell slightly by 0.05 per cent, or 3.76 points, to 7624.34 while the FTSE 250 was down 0.3 per cent, or 64.95 points, to 19,152.27, as fresh economic data from China pointed towards signs of a slowdown in global demand.

Exports from the world’s second-largest economy fell 7.5 per cent in May compared to a year earlier while imports slipped 4.5 per cent.

Across the Atlantic, Wall Street’s Nasdaq briefly reached a 52-week high. The tech-heavy index is home to household names such as Microsoft, Netflix and Tesla.

Back in London, housebuilders sank into the red after data from mortgage lender Halifax showed the first annual fall in house prices in a decade in May. 

Persimmon slid 1.8 per cent, or 23p, to 1227.5p, Taylor Wimpey sank 0.7 per cent, or 0.85p, to 116.8p and Berkeley Group was down 1 per cent, or 39p, to 3999p.

There was good news for GSK after EU regulators authorised the pharma giant’s vaccine designed to protect people aged 60 and over from respiratory syncytial virus.

The disease is a leading cause of pneumonia in the elderly. It fell 1.1 per cent, or 15.2p, to 1376.2p.

Melrose made gains after Barclays raised the turnaround specialist’s target price to 575p from 450p. Shares added 3.3 per cent, or 16.6p, to 519.8p.

Likewise, Qinetiq rose 2.2 per cent, or 8p, to 368.6p after broker Citi said that the defence group was undervalued, and upgraded the target price to 457p from 454p, reiterating a ‘buy’ rating.