Ladbrokes Coral in £3.9bn takeover talks with rival GVC

Mae Love
December 7, 2017

GVC, which owns Bwin and Sportingbet among other brands, has proposed a possible takeover offer for the entire issued and to be issued share capital of Ladbrokes.

The offer values Ladbrokes Coral at 160.9 pence per share, equating to a total equity value of around 3.1 billion pounds, plus a contingent fee of up to 42.8 pence a share, depending on the outcome of the government review.

It said they believed there was a "compelling strategic rationale" for the deal that would create an "online-led globally positioned betting and gaming business".

Ladbrokes Coral Group PLC (LON:LCL) and GVC Holdings (LON:GVC) are in "detailed discussions" about a possible merger to create an online global betting giant.

Kenneth Alexander, chief executive of GVC, will take the helm on the merged company if a deal goes ahead.

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Last month, GVC announced the sale of its Turkish subsidiary, removing a potential obstacle to a deal with Ladbrokes, which had raised this as one sticking point during August's talks.

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

The news follows a wave of consolidation in the sector, which is going through a hard shift from high street betting shops to online gambling.

Ladbrokes Coral was created out of the merger of Ladbrokes and Gala Coral in November previous year.

The transaction will also enhance the enlarged group's position in a number of the world's largest regulated iGaming markets including the UK, Italy and Australia, significantly increasing GVC's current share of revenues from locally regulated or taxed markets to more than 90 per cent.

"The enlarged group would have strong growth prospects with momentum in its online businesses, potential for material synergies including the use of leading proprietary technology, and the opportunity to select the best of both people and operations", the firms said.

Ladbrokes Coral and GVC Holding said that Thursday's announcement does not amount to a firm intention to make an official offer.

Ladbrokes has almost 3,700 bookies on the high street, while the Isle of Man-based GVC has a raft of brands after a series of acquisitions, most recently snapping up bwin.party in February 2016.

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