Desmond unsuccessful in appeal against Ladbrokes Coral merger

Desmond unsuccessful in appeal against Ladbrokes Coral merger

Monday, June 20, 2016 Totally Gaming
The financier was unhappy about the release of details about Ladbrokes' deal Ladbrokes with Playtech

Prominent Ladbrokes shareholder Dermot Desmond has seen his appeal against the company’s merger with Gala Coral dismissed by the UK Takeover Panel.

The financier, who owns around three per cent of the company’s shares, was unhappy with Ladbrokes' disclosure of an agreement made with gaming software company Playtech on the day prior to the merger being announced.

The deal meant Ladbrokes would pay Playtech £40m (€51.6m/$58.5m) on completion of the merger in the form of Ladbrokes' shares, as well as further payments dependant on performance.

"It is clear that Ladbrokes has failed to adequately disclose the basis for the extraordinary payment to Playtech. It was only in response to our requests that the Playtech amendment agreements were belatedly published on the company website," Desmond told Ladbrokes' shareholders at the general meeting called to vote on the merger in November 2015.

Some 90 per cent of shareholders backed the deal at the time, with Ladbrokes Coral now just needing regulatory approval to complete the merger.

Desmond's lawyer had asked the Takeover Panel’s appeal board for a second shareholder vote on one of the resolutions placed before the general meeting. However, his request has now been refused.

The appeal board said: "The circular could have given more contextual information about the justification for the £75m payment, but... if there had been fuller disclosure, there is no rational basis for concluding that the outcome of the shareholders meeting could have been different."

TotallyGaming.com says: “Desmond was a prominent opponent of the deal, but his options now seem limited.

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