Shares of 888, the online casino giant, have soared since it was revealed that they have resumed talks with Ladbrokes, the UK’s largest bookmaker, which hopes to acquire the online casino industry leader. The two companies have discussed an acquisition in the past, with Ladbrokes pulling out due to the fact that 888 had not yet secured a non-prosecution agreement from the United States Government. (Prior to the passage of the Unlawful Internet Gambling Enforcement Act in 2006, 888 accepted wagers from USA players for years.)

From the Scotsman:

The latest potential deal in the online gambling sector follows the merger of PartyGaming with bwin in August, and would represent the first inorganic corporate activity by new Ladbrokes chief executive Richard Glynn, who took over last spring.

Analysts said a deal made sense strategically, marrying Ladbrokes’s strong betting shop business with 888′s casino offering. It would create a combined online gambling business with annual revenue of £350m and earnings of £85m.

It is believed the two companies could save about £25m a year in shared technology, marketing and overhead costs, analysts said.

That would make the transaction about 10 per cent earnings-enhancing by 2012.