Ladbrokes Coral talks over takeover by Bwin owner GVC

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The news follows a wave of consolidation in the sector, which is going through a hard shift from high street betting shops to online gambling.

Gambling giant Ladbrokes Coral could be taken over by bookmaker GVC Holding in a deal worth £3.9bn.

For fast-growing GVC, which since making the jump from AIM to the full list last year has grown organically and through acquisitions such as Bwin.Party, this is its third attempt at a tie-up with Ladbrokes, following talks in August and a first tilt last year.

The final price GVC pays will depend on the outcome of this review into fixed-odds betting terminals (FOBTs), which are big moneyspinners for companies like Ladbrokes but have come under fire for leaving gamblers with very heavy losses.

GVC said it expects "material synergies" from a merger with Ladbrokes, which it would lay out in any forthcoming firm offer.

GVC's move comes at a pivotal moment for the British gambling industry, which is undergoing a government review.


Wilson suggested that if the triennial review sees the government tightens the rules somewhat but stays short of imposing a £2 stake limit on betting machines, this could see the offer for LCL rise to somewhere in excess of 180p, "which looks a healthy premium given the regulatory overhang". It started a 12-week consultation to consider cutting the stake to between 50 pounds and 2 pounds, from 100 pounds now.

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

Based on a closing GVC price overnight of 911.5p and 135.65p for Ladbrokes, the offer would values Ladbrokes Coral at £3.1bn or 160.9p per share, with the CVR of up to 42.8p per share potentially taking the total value up to £3.9bn.

Shore Capital has retained Ladbrokes Coral Group Plc (LON:LCL) to Buy in a report released on 12/07/2017. "You can only sit and wait for so long".

Last year Paddy Power merged with its digital rival Betfair and Ladbrokes merged with Gala Coral. The reduction is expected to badly hit the income from Ladbrokes Coral's 3,500 betting shops, potentially reducing the firm's net value. A larger company could have a greater competitive advantage versus sector peers. The latter would fall as online grows, he added.

Houlihan Lokey and Investec are advising GVC on the deal, while Ladbrokes Coral is working with Greenhill and UBS.

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