GVC and Ladbrokes Coral in £3.9bn takeover talks
The two operators are in “detailed discussions” over a potential acquisition, with final price dependent on outcome of FOBT review
GVC Holdings has announced it is in “detailed discussions” over a potential acquisition of Ladbrokes Coral, a deal which would value the UK bookmaking giant at up to £3.9bn.
A statement on the proposed deal this morning revealed GVC plans to acquire the entire issued and to-be issued share capital of Ladbrokes Coral, with the final price dependent on the outcome of the government’s FOBT review.
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 following the government’s decision on gaming machines.
The cash and share deal values Ladbrokes Coral at 160.9p per share, and would see Lads shareholders own 46.5% of a combined group headed up by GVC CEO Kenny Alexander.
GVC’s Kenny Alexander would be the CEO of the combined group
“The Boards believe that a transaction has the potential to create material shareholder value and that there is a compelling strategic rationale for the Possible Offer,” the two operators said in a statement this morning.
The statement added: “The enlarged group would be an online-led globally positioned betting and gaming business that would benefit from a multi-brand, multi-channel strategy applied across some of the strongest brands in the sector.
“The enlarged group would be geographically diversified with a large portfolio of businesses across both regulated and developing markets, with the scale and resources to address the dynamics of a rapidly changing global industry.”
Clever Kenny Alexander. Sends dummy by telling us he'll wait for FOBT review outcome before bidding for a bookie then strikes early with contingent element to bid. Nifty work
— Dominic Walsh (@walshdominic) December 7, 2017
Today’s news comes less than three months after previous talks between GVC and Ladbrokes Coral had broken down, largely attributed to disagreements over the risk associated with FOBTs and grey market exposure.
However, last month GVC announced it intended to sell its Turkey-facing business for up to €150m to Ropso Malta Limited – a company backed by investors currently providing the primary IT services to the business.
In a joint statement this morning, the two operators said the potential transaction would “significantly increase” GVC’s current share of revenues from locally regulated/taxed markets to more than 90%.