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etvfutures.com December 16, 2017


Ladbrokes Coral and GVC are back in "detailed" takeover talks

07 December 2017, 03:36 | Cesar Cruz

Ladbrokes Coral shares soar on GVC takeover approach

Ladbrokes Coral in talks over takeover by GVC

Online gambling company GVC Holdings is in talks to buy Ladbrokes Coral for up to $5.2 billion (3.9 billion) in a long-awaited deal that would transform it into a bastion of British betting.

Ladbrokes branch in Dublin, Ireland.

The GVC chief executive, Kenneth Alexander, is expected to lead the combined group, although the firms said plans for the final management line-up would be worked out over the coming weeks.

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

GVC, the Isle of Man, owns online betting portals such as Bwin and Sportingbet.

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.

Speculation about a combination of GVC and Ladbrokes emerged a year ago.

The boards of GVC Holdings and Ladbrokes Coral announced that they have entered detailed negotiations in regards to a possible merger of the two companies.

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Now, as the United Kingdom government's ongoing regulatory review continues to cast a shadow over the gambling sector, it would appear that Ladbrokes' management is keen to get a deal done.

FILE PHOTO: A branch of Ladbrokes is seen in central London, Britain, May 17, 2016.

At the end of October, the UK Government revealed a crackdown on highly controversial fixed-odds betting machines which have been widely blamed for the constantly increasing number of gambling addicts.

"Against this it does bring in some geographic risk in GVC notably around Germany following the exit from Turkey, whilst the cash elements, we estimate worth £600m and £800m (max for the triennial review element), are more the comfortable from the existing balance sheet and future cash generation". If the maximum stake is cut to only £50 from £100, shareholders are set to receive the maximum distribution.

GVC is offering 160.90 pence a share in cash and stock, plus a contingent value right worth as much as 42.80 pence a share, the companies said in a statement Thursday. As Casino Guardian has previously reported, more and more countries have been focused on imposing stricter regulatory regime to their gambling markets as part of their attempts to tackle possible gambling-related harm. Although there has not been a firm offer, the two companies appear to be positive about the potential for a deal to be done.

"This triennial review has run and run and run and with the political climate in the United Kingdom who knows how much longer it may well run for?" he said.

The news comes just a year after Ladbrokes and Gala Coral completed a merger. The latter would fall as online grows, he added.

Houlihan Lokey and Investec are advising GVC on the deal, while Ladbrokes Coral is working with Greenhill and UBS.



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