Published: Чт, Декабря 07, 2017
Business | By Max Garcia

Ladbrokes Coral surges on GVC takeover bid

Ladbrokes Coral surges on GVC takeover bid

GVC Holdings Plc is in advanced talks to acquire United Kingdom bookmaker Ladbrokes Coral Group Plc for as much as 3.9 billion pounds ($5.2 billion), as gambling companies seek greater scale in a business that's shifting online.

GVC, which also owns Sportingbet and PartyCasino, has tabled a cash-and-shares approach valuing Ladbrokes at 160.9p a share, with loan notes on top worth an extra 42.8p a share.

Ladbrokes Coral shares jumped as much as 29 percent, with GVC up as much as 8.3 percent, early Thursday in London.

GVC Chief Executive Kenneth Alexander is expected to head up the combined group, although this has yet to be finalised and may change over the coming weeks.

"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 statement said.

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

The firms said: "The enlarged group would be an online-led, globally positioned betting and gaming business that would benefit from a multibrand, multichannel strategy applied across some of the strongest brands in the sector".

Last year Paddy Power merged with its digital rival Betfair and Ladbrokes merged with Gala Coral. The value of this would be determined by reference to the outcome of the current review of gaming machines and its estimated impact on the run-rate profitability of Ladbrokes Coral's United Kingdom business.

On Thursday, they said GVC had made a non-binding cash and shares offer to Ladbrokes, with the final price determined by the outcome of the government's review into gambling machines in United Kingdom betting shops, which could hit profits at the target company. Discussions in the summer disintegrated following a price dispute prior to a government-led gambling review.

Isle of Man-based GVC said it expects the transaction will be "double digit" earnings per share accretive from the first full year following completion and after the results of the Triennial Review, even if the maximum bet on FOTBs is set at £2.

It announced last month that the maximum stake would be cut from £100 to between £2 and £50.

"GVC got lucky at the third attempt and LCL shareholders can count their winnings", said analyst Neil Wilson at ETX Capital.

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