GVC close to £3.9bn takeover of Ladbrokes Coral

GVC close to £3.9bn takeover of Ladbrokes Coral

GVC shareholders would be entitled to the rest.

Based on share prices as at the close of business yesterday, the GVC offer values Ladbrokes Coral at 160.9p per share, which equates to a total equity value of £3.1bn (€3.5bn/$4.1bn).

It would also see Ladbrokes Coral shareholders own around 46.5% of the combined group and GVC around 53.5%.

Shares in Ladbrokes Coral surged by 25% to 170p in early trading in London on Thursday.

The value of the CVR, which would be satisfied by the issue of loan notes by GVC, will be determined by the outcome of the UK's ongoing Triennial Review relating to the regulation of Category B2 fixed-odds betting terminals (FOBTs) and its estimated impact on the run-rate profitability of Ladbrokes Coral's United Kingdom business.

According to the BBC, the two firms are in "detailed discussions".The deal, which would be in cash and stock, values Ladbrokes Coral at £3.9bn.

Last year Paddy Power merged with its digital rival Betfair and Ladbrokes merged with Gala Coral.

GVC, which boasts 79 million registered accounts and operates in 21 languages through names such as sportingbet and partypoker, previously bought bwin.party in 2016.

The review is part of a government crackdown on FOTBs after MPs raised concerns the machines were too addictive and fuelled problem gambling.

In a joint statement, the two firms said GVC's chief executive Kenneth Alexander would be the boss of the enlarged group.

"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 companies said.

The combined group would have beefed-up operations across some of the world's biggest regulated online gaming markets, including the UK, Italy and Australia.

The CVR is calculated on a sliding scale based on what maximum stakes are imposed under the triennial review, with £0 worth 0p, £20 worth 30.3p per share and £50 worth 42.8p.

"GVC got lucky at the third attempt and LCL shareholders can count their winnings", said analyst Neil Wilson at ETX Capital.

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