Friday, 23 February, 2018

Ladbrokes Coral in £3.9bn takeover talks with bookmaker GVC Holding

Newbury Races Source Getty
Nellie Chapman | 07 December, 2017, 14:53

According to today's press release, Ladbrokes stockholders are likely to be offered cash and shares equal to 160.9p a share, plus an uplift worth up to 42.8p a share depending on the outcome of the United Kingdom government's ongoing regulatory review.

This merger is just the latest in a string of deals completed by GVC over the past decade.

The proposed deal, announced today (7 December), would create a global online gambling group that the boards of the two companies claim would have strong growth prospects and an enhanced position in some of the world's largest regulated online gaming markets, including the UK, Italy and Australia.

Shares in the 230-year-old Ladbrokes jumped 26 percent in early trading, while GVC shares rose 6 percent on confirmation of the long-rumored offer, which is in cash and shares.

As revealed by GVC Holdings in a statement published on the gambling operator's website, the possible offer is expected to be structured as a scheme of arrangement in accordance to which GVC Holdings would acquire the entire capital of Ladbrokes Coral. The company has approximately 3,500 high street betting shops.

GVC said it expected "material synergies" from a merger with Ladbrokes, which it would lay out in any forthcoming firm offer.

The talks marks the third attempt previous to reach a deal between the two firms, after two previous unsuccessful round of negotiations. Any transaction would also be subject to regulatory approvals, and shareholder approval from both companies.

The possible merger between two of the largest players in the British and global gambling markets could come as a outcome of the consolidation process which has already started in the industry.

According to the statement, the purchase price would depend on the outcome of the highly-anticipated triennial review into the United Kingdom gambling industry, in which the government is expected to call for a significant reduction in the maximum stake playable in fixed odds betting terminals. Current rules limit maximum stakes on these machines to £100, but this could be slashed to as low as £2. No final decision on the maximum stakes' has been made, with the Government being expected to make an announcement in January 2018. Ladbrokes plc is a British-based betting and gambling company. Over the last couple of years she has been engaged in writing about a number of industries and has developed an interest for the gambling market in the UK.