(qlmbusinessnews.com via telegraph.co.uk – – Fri, 22 Dec 2017) London, Uk – –
The owner of gambling brands SportingBet and Bwin has agreed to acquire FTSE 250 bookmaker Ladbrokes Coral in a widely-trailed deal worth up to £4bn.
GVC will pay Ladbrokes shareholders 32.7p in cash and 0.141 GVC shares per Ladbrokes share, along with a loan note worth up to 42.8p depending on the outcome of the triennial review into controversial fixed-odds betting terminals (FOBTs).
GVC’s chief executive Kenneth Alexander, who will continue to lead the enlarged company, said the proposed merger was “a truly exciting prospect.”
After the deal it is expected that Ladbrokes shareholders will own around 46.5pc of the enlarged company, with GVC’s backers owning the remainder. It will be one of the largest retail gambling firms in the world and is likely be propelled into the FTSE 100.
The £4bn price tag would value Ladbrokes at a premium of 52.7pc based on its closing price on December 6, the last day before merger talks between the companies were announced.
The value of the loan note will depend on the maximum stake the government chooses to impose on FOBT operators, from zero if the stake is as low as £2 to 42.8p if it is £50 or above.
If the loan note is worthless, then the deal will value Ladbrokes at £3.2bn, at a 21.2pc premium.
The deal follows two failed attempts to agree terms on a merger between the two companies.
Ladbrokes chairman John Kelly said: “The Ladbrokes Coral Board believes that the proposed combination with GVC accelerates our strategy to improve the customer experience, drive faster online growth and build a more diverse and extensive international portfolio of businesses.”
Shares in Ladbrokes were up 1pc to 176p in morning trade, while those in GVC were down 1.5pc to 920p.