UK-based betting operators Ladbrokes and Gala Coral could finalise their £2.3-billion merger by the end of October. The two companies were reported to have agreed to sell a total of 359 betting shops in order to be finally allowed to complete their deal.
Commenting on the deal, the Chief Executive Officer of Ladbrokes Jim Mullen said that the sale of the above-mentioned shops would clear the last major complication before the companies. He shared that the merger with Coral would provide Ladbrokes with the opportunity to become more focused on other matters related to the bookmaker’s future growth.
According to media reports, both Stan James and Betfred have showed their interest towards the assets being sold. Not long ago, Betfred has been pointed as the company that is most likely to purchase the betting shops in question. Now, it became clear that it is to acquire a total of 322 retail betting outlets at the price of £55 million, while Stan James is to buy 37 betting shops for £500,000.
The takeover deal comes after the UK Competition and Markets Authority (CMA) allowed Ladbrokes and Gala Coral to carry out their long-desired merger, but only in case that the companies dispose of between 350 and 400 betting shops. The CMA has expressed its concern about eventual monopoly over certain areas of the UK, so it made sure the two bookmakers will first meet its conditions before the deal is finalised.
Even with the sale of the 359 betting shops to competitors in line, Ladbrokes and Coral will end up having about 3,700 retail betting outlets. The companies plan to use the £55.5 million received from the sale in order to repay debt.
The merger between two of the largest bookmakers on the territory of the UK comes at a time when the betting industry of the company has been aimed at consolidation. Paddy Power has merged with Betfair in order to strengthen its positions on the market. On the other hand, William Hill has also been looking to consolidate its business and has been recently negotiating with the Canada based casino and poker brand Amaya to form a gambling company with market value of £5 billion.
Unfortunately for William Hill, the merger with Amaya could turn out to be unsuccessful, as the biggest shareholder of the UK company Parvus Asset Management opposed to the eventual merger with Amaya, saying that the strategic logic of such a merger was limited and would have a negative influence on the company’s shareholder value.
- Author
Olivia Cole
