GVC Holdings and Ladbrokes Coral Back In Merger Talks
The merge talks between GVC Holdings and Ladbrokes Coral have been going on for at least a year according to reports. However it now seems that GVC is aggressively seeking to acquire Ladbroke Coral after failing to do so earlier this year. The unloading of GVC’s Turkish business was reportedly mainly aimed at ensuring possible merger would go ahead.
Thursday saw CEO of GVC Kenny Alexander declare that the proposed takeover of Ladbrokes Coral by them could be a “fantastic opportunity”.
Many commentators are labeling the proposed deal that could be worth as much as £3.9 billion as opportunistic by GVC who are well aware of the uncertainty Ladbrokes is facing regarding the outcome of the Government probe into Fixed Odds Betting Terminals that make up a sizable portion of Ladbroke’s revenues.
Alexander said he was relishing the prospect and would be “very, very aggressive” in growing their market share and business. Should the deal go thorough it could create one of the largest gambling companies around with an estimated market capitalization of around £5.3 billion. Alexander in a conference call said,” It would be a very, very brave man or woman that would bet against us delivering shareholder returns based on our historical performance. I think we have done it before and I think we are definitely going to do it again.”
GVC have reportedly covered themselves in the event of the maximum stakes on FOBTs being slashed from the current £100. Alexander also said that both brands would remain untouched and no rebranding was planned. He 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. The enlarged group would be geographically diversified with a large portfolio of businesses across both regulated and developing markets, with the scale and resources to address the dynamics of a rapidly changing global industry.”
In terms of regulations GVC is required to announce a firm intention to make a formal bid by January 4. On the heels of Alexander’s comments, theshare price in Ladbrokes soared 29 percent while GVC shares price rise over five percent.