Ladbrokes Coral in talks over takeover by GVC

Gambling huge Ladbrokes Coral is in "comprehensive" talks over a takeover by online rival GVC over an bet9ja's welcome offer that could value the group at up to ₤ 3.9 bn.

Under the yohaig code proposals, GVC - which owns the Bwin and Sportingbet brand names - would hold 53.5% of the combined group.

The optimum rate GVC will pay will depend on the outcome of the federal government's review of video gaming machines.

Ladbrokes Coral shares jumped 23% on news of the talks, while GVC's were up by 4%.

The Department of Culture, Media and Sport has said it will cap the size of stakes gamblers can make on fixed-odds wagering terminals, amidst concerns they may damage susceptible people.

GVC and Ladbrokes Coral stated that the review could effect on the profitability of Ladbrokes Coral's UK business.

Under the proposed takeover offer, GVC will pay 160.9 p for each Ladbrokes Coral share, which would value the company at ₤ 3.1 bn.

However, if the outcome of the government's evaluation of gaming terminals is beneficial to the gaming market, and enforces a greater limit on repaired chances bets, then GVC will pay Ladbrokes Coral shareholders a so-called "contingent value right" (CVR) of as much as 42.8 p per share. When included to the initial payment, this could value the business at approximately ₤ 3.9 bn.

the yohaig code takeover of Ladbrokes Coral could proceed before the government reveals the yohaig code result of its review. Following the yohaig code result, GVC would then pay the CVR to Ladbrokes Coral investors.

GVC and Ladbrokes Coral have previously held discuss a takeover, however they broke down.

"GVC got lucky at the 3rd attempt and Ladbrokes Coral investors can count their payouts," stated Neil Wilson, senior market analyst at ETX Capital.

"Whilst this promotion code offer was constantly likely, the majority of had thought GVC would wait until the federal government's triennial evaluation of repaired odds betting terminals was completed before it would take place."

The "tie-up has always made sense", he added.

Isle of Man-based GVC "has little debt and has the international and fast-growing online existence, Ladbrokes Coral has the physical footprint, High Street name and sports book".

Under takeover guidelines GVC now has up until 4 January to decide whether to make a company bet9ja's welcome offer for Ladbrokes Coral or to withdraw.

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