Online and land gambling group Ladbrokes plc confirmed in a stock exchange announcement Thursday that it is in “detailed” talks regarding a potential takeover by online rival GVC Holdings plc, valuing it at up to GBP 3.9 billion.
Shares in Ladbrokes Coral soared 25 percent following the announcement, whilst GVC stock rose 7 percent on the London market.
The proposal is that GVC Holdings would pay cash and shares under the deal, which would see Ladbrokes Coral investors own 46.5 percent of the combined group.
It is the latest move in a wave of consolidating mergers and takeovers in the gaming and betting industry and comes just a year after Ladbrokes and Gala Coral completed a merger that formed Ladbrokes Coral.
GVC has also grown with the takeover of bwin.party, owner of sites such as Party Poker (see previous InfoPowa reports).
Ladbrokes' statement Thursday disclosed that the companies were “in detailed discussions regarding the possible combination of the two businesses”, citing a “compelling strategic rationale” for the deal, and that it would result in an “online-led globally positioned betting and gaming business”.
This would strongly position the combined groups in major international such as the UK, Italy and Australia, it added.
Keith Alexander, chief executive of GVC, would be expected to lead the combined group, and said that an agreement could boost earnings from its first full year after completion, even if the UK government decides on the most stringent curbs on retail shop gaming machines.