Dermot Desmond ups battle against Ladbrokes-Coral merger

Having launched a scathing attack on Ladbrokes £2.2 billion planned merger with Gala Coral, which saw the publication of saynotocoral.com, Irish financier Dermot Desmond is set to further argue his concerns regarding the merger at a Ladbrokes investor meeting to be held this Tuesday in London.

Desmond, who holds a 2.8% company stake, and his public attack against the merger highlighted a perceived lack of long-term value for Ladbrokes investors.

The Irish business magnate had further criticised the performance of Ladbrokes’ governance since the company’s 2006 demerger from Hilton Group, publically reprimanding Chairman Peter Erskine for the total collapse of corporate performance, whilst market competitors have thrived.

Desmond further argues that the merger has been driven for the benefit of a few stakeholders in Ladbrokes and Gala Coral value chains, with a merged company set to increase its net debt to £1.2 billion (or 3x EBITDA).

Representatives of Desmond told the Irish Sunday Independent

“We are uncomfortable with the transaction. We think it is a deal that should not happen, We don’t expect to overturn the vote on Tuesday, but we want to raise the level of discourse with shareholders.”

Desmond’s actions have been lambasted by Chief Executive of Old Mutual Global Investors, Ladbrokes third biggest shareholder. This weekend Buxton stated to the Daily Telegraph that Desmond’s concerns were “late in the day” and simply “wishy-washy”.

Buxton reaffirmed that he believed that all major Ladbrokes shareholders apart from Desmond backed the merger and would move to gain the 50% of votes needed for its progress.