Ladbrokes upbeat as reports suggest Gala Coral deal is close

Ladbrokes upbeat as reports suggest Gala Coral deal is close

Monday, December 10, 2018 Totally Gaming
The combined entity has been valued at £3.5bn

Ladbrokes shares were up more than 3 per cent today (Monday) as reports suggest the gaming operator is close to agreeing a £3.5bn (€5.0bn/$5.4bn) merger with rival Gala Coral.

The Sunday Times newspaper reported that the terms of the deal – the latest in a flurry of mergers and acquisitions in the industry - could be completed by the end of this week, suggesting that Ladbrokes would fund the deal through a new share issue. 

Ladbrokes would not comment on the terms of the deal or a time scale for its completion, however a spokesman did tell that “no announcements or statements are currently scheduled for this week but discussions are ongoing”.

The deal, which was first announced in June, would involve Ladbrokes and Gala Coral subsidiaries Coral Retail, Eurobet Retail and the firm’s online business. Gala Coral is owned by a group of private equity investors, including Apollo Global Management and Cerberus Capital Management.

The proposed merger would create a group with a huge online presence as well as 4,000 land-based shops. The potential dominance of the combined entity on the high street was enough to cause Ladbrokes’ proposed takeover of Gala Coral to be blocked by the UK Department for Trade and Industry in 1998, but it is believed that the ascent of online gaming could diminish the Competitions and Markets Authority’s concerns about the current deal. reported last month that the financial markets are positive about the potential deal, with Bank of America Merrill Lynch analyst Simon Larkin saying it would "make strategic sense".

The news comes just days after market rival 888 agreed an £898m deal to buy, seemingly seeing off competition from GVC Holdings to acquire the online operator.


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