Ladbrokes Coral and GVC seal acquisition deal

The GVC Holdings acquisition of Ladbrokes Coral is on, according to UK media reports early Friday, which advise that GVC has agreed to buy its rival for GBP 4 billion.

The online gambling group, which owns brands such as Bwin, Sportingbet, PartyPoker and Foxy Bingo, confirmed it is to pay 32.7 pence in cash and 0.141 new GVC shares for each Ladbrokes share.

The final price GVC pays depends on the outcome of a UK government review into fixed-odds betting terminals (FOBTs), which are money spinners for companies such as Ladbrokes’ retail division but have come under fire from anti-gambling activists.

Following a review, the UK government said in October that the maximum stake allowed on FOBTs could be slashed over concerns they fuel addiction. It started a 12-week consultation to consider cutting the stake to between GBP 50 and GBP 2, from GBP 100 currently (see previous reports).

GVC’s offer values Ladbrokes Coral at 164.4 pence per share, equating to a total equity value of around GBP 3.2 billion, plus a contingent fee of up to 42.8 pence a share, meaning the bookmaker could be valued at about GBP 4 billion.

GVC announced this month it was in talks with Ladbrokes about a possible cash-and-shares takeover.

The merged company is expected to be big enough to enter the UK’s FTSE 100 index.

The deal is expected to close late in the first or early in the second quarter of 2018, GVC said.

Bloomberg reported that Ladbrokes investors could receive as much as 207.2 pence for every Ladbrokes share – 19 percent higher than Thursday’s closing price.

The merger would follow previous major mergers like that of Paddy Power and Betfair as well as Ladbrokes with Coral.