The gambling and online gambling group GVC Holdings has recently held talks about a possible takeover of the UK bookmaker Ladbrokes Coral. GVC Holdings made a takeover bid of about £3.6 billion to the British bookmaker which currently owns 3,500 high street outlets.
According to two sources familiar with the negotiations, the takeover talks have failed and are closed for the time being. If they have been successful, they would have created one of the largest gambling companies not only on the territory of the UK, but also on a global scale.
The two people with knowledge of the takeover talks, the proposal of GVC Holdings valued Ladbrokes Coral at about £2.7 billion. The Isle of Man-based gambling operator, however, offered an additional uplift of its takeover bid, depending on the outcome of the UK Government’s review of the local gaming industry. This could have boosted the final prize offered by GVC Holdings up to £3.6 billion.
The two companies refused to make a comment on the situation.
Still, in spite of the fact that takeover talks between GVC Holdings and Ladbrokes Coral have broken down, market analysts have shared their opinions that the approach has only been the latest sign that British gambling companies are considering further consolidation in the market. What is more, such talks have come at a time when the local industry is trying to become stronger in order to face the upcoming regulatory measures that the country’s Government and competent authorities are to impose.
The gambling sector of the UK has seen a wave of merger and acquisition deals lately, thanks to the fact that companies have been trying to consolidate their presence in the market, so that they become able to neutralise constantly increasing costs and rising taxes imposed as a result of the stricter regulatory strategy followed by local regulators.
This is not the first time when GVC Holdings made a takeover bid for Ladbrokes, with the previous talks being held back in 2016. That was the time when Ladbrokes was fully focused on finalising its £2.2-billion merger with Coral and the talks turned out not to be successful.
But the Ladbrokes-Coral merger was not the only reason why the talks failed. At the time when the negotiations were held, the companies disagreed over the true value of the companies, and the problem got even worse due to the uncertainty which came along the local Government’s review of the British gambling market and more specifically the FOBTs review that is expected to be officially released in the autumn.
On the other hand, GVC Holdings has also known success under its Chief Executive Officer Kenny Alexander, with its market value being estimated to £2.3 billion, who has made the company strong through acquisition deals. Currently, the company is primarily focused on online gaming and sports betting, as well as on developing its Foxy Bingo brand. It also looks like that the company is willing to make an entry into the betting shops business, considering the fact that its takeover offer was made exactly for Ladbrokes Coral business, which as mentioned above, currently runs about 3,600 betting sites across the country.
- Author
Olivia Cole
