Sportingbet confirms talks

Online bookmaker Sportingbet has confirmed it is in talks about 'potential opportunities', rumoured to be with Swedish rival Unibet in a deal that could be worth up to £600m."The company confirms that it has had and will continue to have discussions with different parties in relation to a variety of potential opportunities," read a brief statement Monday."There can be no certainty as to whether or not such discussions will result in any form of transaction. Any further announcement will be made if and when appropriate."The company took the unusual step of issuing a clarification after the market closed to point out that 'none of the discussions with different parties in relation to a variety of potential opportunities currently contemplate an offer for Sportingbet for the purposes of the City Code on Takeovers and Mergers.'A report in the Sunday Times yesterday suggested the two companies have held preliminary discussions about combining the businesses. Further talks expected in coming weeks.According to the newspaper's source, an announcement won't come until next year and that more talks are needed to seal the deal.It would be the second big merger in recent months. PartyGaming is merging with Austrian rival bwin to create the world's largest listed online gaming group.In a separate announcement Monday, Sportingbet firmed up one of its "potential opportunities", signing a joint venture agreement with Russia's second largest licensed bookmaker.A five-year tie-up with First International Bookmakers Company (FIBC), trading under the Liga Stavok brand, will create a Russian online sports betting offering. Sportingbet will be its sole provider of online services.Analysts at Daniel Stewart are excited. They think the pair should capture a significant proportion of this fast growing Russian market. "We estimate that the current retail betting penetration in Russia is as low as 10%, which further implies there is significant scope for further growth in the market. If Liga Stavok had 10% of the market (which we think could be very conservative) it could yield c$180m in gross gambling revenues," the broker said in a note Monday."We do not know the details of the JV agreement at this stage but we estimate that if SBT received c30% share of revenue this would equate to c$60m of revenue which would boost profits and cash significantly."