Economy

GVC proposes £3.9bn acquisition of Ladbrokes Coral

GVC proposes £3.9bn acquisition of Ladbrokes Coral”

Terms of the offer mean that Ladbrokes Coral shareholders would hold 46.5% of the combined business, with GVC shareholders to other 53.5%.

Bookmaker GVC Holdings has offered to buy Ladbrokes Coral for up to 3.9 billion pounds to create a betting giant able to cope with the tougher rules being imposed by the British government.

GVC has also bulked up with a takeover of bwin.party, owner of sites such as Party Poker.

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.

Ladbrokes Coral - which operates 3,500 shops across England, Wales and Scotland - would receive 32.7p in cash and 0.141 ordinary GVC shares for each Ladbrokes Coral share.

The final price will depend on the outcome of a government review into fixed-odds betting terminals (FOBTs).

Last year Paddy Power merged with its digital rival Betfair and Ladbrokes merged with Gala Coral.

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

In addition, the companies have agreed that should the deal go through, Kenneth Alexander, now chief executive of GVC, would take on the same role at the enlarged group.

Based on the share prices of the two companies at close of business on 6 December, the possible offer values Ladbrokes Coral at 160.9p per share, plus a CVR of up to 42.8p per share.

They added that the enlarged group would benefit from operating different brands across different markets including the UK, Italy and Australia. In October it started a 12-week consultation to consider cutting the stake to between 50 pounds and 2 pounds, from the current 100 pound wage.

GVC expects the deal to boost earnings from its first full year after completion, even if the Government decides on the biggest possible curbs on gaming machines.

"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.



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