GVC Buys Ladbrokes Coral in £4b Deal

GVC Holdings has completed the acquisition of Ladbrokes Coral Group Plc, having agreed to the deal back in December of 2017. The deal could be worth up to £4 billion, with Ladbrokes Coral shareholders receiving 32.7 pence per share alongside 0.141 shares in the newly structured GVC. There is also a possible 42.9 pence available depending on the government’s FOBT decision.

Noel Hamill, who previously worked for the telephone company, EE, has been appointed as the Chief Marketing Officer for Ladbrokes Coral, taking charge of marketing across the group. GVC already owns a number of betting companies, including Bwin, Sportingbet and the Foxy Bingo brand and its shareholders will own 53.5% of the group now the deal is confirmed.

It’s Hot on the Heels of the Ladbrokes Coral Merger

There was at least a slight sense of surprise in the industry at the move, given that GVC’s proposal to buy the company came just months after Ladbrokes and Coral merged together in the first place. In doing so, they became the biggest bookmaker on the high street, with more than three and a half thousand outlets and over twenty-five thousand employees.

It’s likely that GVC waited until the takeover was complete in order to see what the Competition and Markets Authority would say about the takeover. GVC Holdings has around three thousand employees of their own, having grown over recent years thanks to a number of takeovers. The most notable of these was the purchase of Bwin.party last year.

FOBT Decision Will Dictate Final Price of Deal

The government’s impending decision about a possible cap to the maximum stake playable on Fixed Odds Betting Terminals will dictate the final value of the deal. The government is in the middle of a review of the situation at the moment, hearing from numerous concerned parties. The Department of Culture, Media and Sport is driving the review, which comes amid concerns for problem gamblers and vulnerable people.

At the moment the maximum stake playable on the machines is £100 per spin, with ministers considering a maximum cap of anywhere between £2 and £50. Given that the decision on the cap will affect high street bookmakers severely if it is as low as £2, it’s little wonder that the final deal price will depend on what’s decided. There will be an extra amount of up to 42.8 pence per share depending on the final decision over FOBTs.

A Truly Exciting Prospect

The takeover has been described by Kenneth Alexander, the Chief Executive of GVC, as being ‘a truly exciting prospect’. The Chairman of Ladbrokes Coral, meanwhile, believes that customers will be the ones to gain the most from the tie-up between the two businesses. John Kelly said that it will ‘improve the customer experience, drive faster online growth and build a more diverse and extensive international portfolio business.’

Whilst the high street side of the business is undoubtedly an exciting one and a money-maker, it is in the online sector that GVC Holdings will look to drive things on. With brands, such as Sportingbet, Foxy Bingo and PartyCasino, already on their books, there’s no doubt that online is where GVC’s strengths lie. Kenneth Alexander will lead the new look company, which John Kelly believes has ‘compelling strategic rationale’.

It’s certainly the case that the acquisition of Ladbrokes Coral gives GVC Holdings strong access to European markets. It is the second biggest online operator in Italy, for example, whilst they’re the number one gambling retail business in Ireland, Spain and Belgium. There is also a strong online presence in Australia for the company, with Ladbrokes being the ‘third-most recognisable corporate bookmaking brand’. Alexander said,

The creation of one of the world’s largest listed sports betting companies, combining a portfolio of established brands, proven technology and leading market positions in multiple geographies, is a truly exciting prospect. In a dynamically evolving industry, the transaction creates an enlarged group with the scale, diversity, proprietary technology and management expertise to pursue many opportunities globally.

The New Look GVC

With the move to takeover Ladbrokes Coral now finalised, it means that GVC Holdings has an impressive portfolio of betting companies in its roster. The following brands are now under the GVC umbrella:

It means that GVC are one of the biggest and most influential players in the betting market, with so many brands now giving them power in the world of gambling. Kenneth Alexander pointed to the company’s ‘proven track record of creating shareholder value through the successful integration of acquired businesses’ in his explanation of why he believes the move will prove to be a successful one.