SBC News Voice of the Sports Betting Industry
Multiple London business news sources have disclosed that Gala Coral and Ladbrokes are close to agreeing terms on a £3.5 billion merger, which would create the UK’s biggest bookmaker with over 4000 betting shops.
Ladbrokes who are being advised on the merger terms by investment banks’ Greenhill Capital and UBS are expected to issue new share placements in order to raise cash for the acquisition of Gala Coral.
Negotiations between the two operators, are believed to have been ramped up due to recent consolidation in the gambling sector, which has seen igaming operator bwin.party become the target of an acquisition duel between 888 Holdings versus GVC Holdings/Amaya Inc.
Merger talks were first announced on 23 June by Ladbrokes following press speculation regarding the two operators. The governance of both operators had outlined to media and staff members that a potential merger between the two companies would take up to a year to process.
UK business sources have reported that initial discussions between the two operators are believed that have progressed well, with both of the operators executive teams finding strategic and operational synergies.
In June, Ladbrokes CEO Jim Mullen, stated to the media that he was confident that a Ladrokes/Gala Coral Merger would clear all UK regulatory and competition hurdles.
At present the biggest hurdle to the merger appears to be Gala Coral complex ownership structure which sees the operator hold £2.2 billion debt on its books to hedge funds Apollo, Cerberus and Park Square following its 2011 corporate re-structure
