Gambling group GVC (GVC) has confirmed long-run speculation that it wants to buy Ladbrokes Coral (LCL). In one of the worst kept secrets in the gambling industry, GVC has outlined a proposal which values Ladbrokes at a maximum of 203.7p per share, or £3.9bn.
The suitor has proposed to pay a mixture of cash and shares. Ladbrokes shareholders would initially get 32.7p in cash and 0.141 GVC shares for each of their shares in the high street and online bookmaker.
GVC is also offering a further amount of up to 42.8p per Ladbrokes share depending on the outcome of the Government’s current review of fixed-odds betting terminals and how that may affect Ladbrokes’ UK profitability in the future.
The deal would be structured in favour of GVC shareholders where they would own 53.5% of the enlarged business and Ladbrokes’ shareholders would own 46.5%. GVC boss Kenneth Alexander would be chief executive of the combined business.
‘The boards believe that a transaction has the potential to create material shareholder value and that there is a compelling strategic rationale for the possible offer,’ says GVC in a statement today.
‘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.’
GVC has been one of the dominant consolidators in the gambling sector for several years. Having acquired Sportingbet in 2013, it went on to buy Bwin.Party in 2016 and is now a FTSE 250 business.