Ladbrokes and Gala Coral Agree to £2.3bn Merger
The merger, which is subject to scrutiny from the competition regulators, creates a company with 3,945 betting shops, revenues of £2.1 billion and one that has a market capitalisation of £2.3 billion.
Shareholders in Ladbrokes will own 51.75% of the new company, which is to be listed on the London Stock Exchange under the name Ladbrokes Coral, while the private investors in Gala Coral will control the remaining 48.25%. Gala Coral’s bingo business is not part of the merger and will continue to operate as a separate entity.
Current chief executive of Ladbrokes, Jim Mullen, retains his position in the new business while Carl Leaver, Gala Coral’s chief executive, becomes the executive deputy chairman for 12 months after the deal is completed.
Much has been said in today’s newspapers about Gala Coral executive Andy Hornby taking the role of chief operating officer of Ladbrokes Coral’s UK betting shop and digital business. Hornby was in charge of HBOS when it infamously collapsed in 2008, only two years after Hornby took the helm. Despite being the new Ladbrokes Coral COO, Hornby will not be on the public company’s Board of Directors.
Peter Erskine, the Ladbrokes Chairman who previously announced he was to step down from his role during 2015, said of the merger:
“This is a major strategic step for Ladbrokes which firmly accelerates our strategy to improve the customers’ experience and build recreational scale. Ladbrokes and Coral are two highly complementary businesses, with rich heritage and brand presence across the UK and internationally. Together, we will create a leading betting and gaming business combining strong brands with an attractive multi-channel offering and an extensive national and international coverage.”
Ladbrokes’ share price fell 2.5% in early morning trading after the announcement of the deal, which sees Ladbrokes slash its dividend to 3p per share as it attempts to shore up its finances.
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