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

Lloyd Doyle
December 7, 2017

Based on share prices as at the close of business yesterday, the GVC offer values Ladbrokes Coral at 160.9p per share, which equates to a total equity value of £3.1bn (€3.5bn/$4.1bn).

After the deal Ladbrokes shareholders would hold around 46.5pc of shares in the enlarged business, with GVC's backers owning the remainder.

Shares in Ladbrokes Coral surged by 25% to 170p in early trading in London on Thursday.

This is the third time GVC, owner of the Bwin, Sportingbet and Foxy Bingo brands, has approached Ladbrokes about a takeover.

Ladbrokes completed its £2.3bn merger with Coral in November a year ago, but it is understood GVC first approached Ladbrokes over a tie-up when it was finalising the deal.

"Whilst this deal was always likely, most had thought GVC would wait until the government's triennial review of fixed odds betting terminals was finished before it would happen".

Under the terms of the offer, Ladbrokes Coral shareholders would be entitled to 32.7p in cash and 0.141 ordinary GVC shares for each Ladbrokes Coral share, and a potential further value of up to 42.8p structured as a contingent value right (CVR).

The review is part of a government crackdown on FOTBs after MPs raised concerns the machines were too addictive and fuelled problem gambling.

The determination of the senior management positions are to be finalised over the coming weeks, but both parties have agreed that GVC's Kenneth Alexander will be the CEO of the enlarged group following completion.

A statement on the latest potential deal said the companies were "in detailed discussions regarding the possible combination of the two businesses".

The combined group would have beefed-up operations across some of the world's biggest regulated online gaming markets, including the UK, Italy and Australia.

It announced last month that the maximum stake would be cut from £100 to between £2 and £50.

"GVC's recent move to exit Turkey cleared the last barrier and LCL shareholders should be pleased to see the firm is now better insulated against the vagaries of the United Kingdom market", said Neil Wilson, senior market analyst at ETX Capital.

Other reports by Iphone Fresh

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