Monster Call… GVC leads £3.9 billion Ladbrokes Coral merger talks

FTSE online gambling group GVC Holdings has this morning informed that it has entered ‘detailed discussions’ to form the ‘UK’s largest online and retail betting operator’, as the company continues merger negotiations with Ladbrokes Coral Plc.

Updating the market, a GVC-Ladbrokes-Coral combination is valued at £3.9 billion, with GVC presenting a combined cash and shares offer – value range from 160.9p – 203.8p per share ‘dependent on the outcome of triennial review’.

Acting as the deal leader, GVC investors would own a majority 54.5% shareholding in the new enterprise. The new enterprise would remain on the FTSE100 exchange, with GVC governance detailing to its investors that the business could be ‘potentially bigger than UK highstreet retailer M&S’.

In its corporate update, GVC governance chose not to detail any structural arrangements but disclosed that CEO Kenny Alexander is designated to become CEO of the enlarged group.

Updating investors and the media, deal stakeholders are confident that they can deliver a multi-channel, regulated market focused, tech leading betting enterprise, which will be able to overcome any potential UK barriers imposed by the pending judgement of the UK triennial review.

GVC presented the following ‘joint-statement’ this morning

“The Boards believe that a transaction has the potential to create material shareholder value and that there is a compelling strategic rationale for the Possible Offer. The enlarged group would be an online-led globally positioned betting and gaming business that would benefit from a multi-brand, multi-channel strategy applied across some of the strongest brands in the sector.”

“The enlarged group would be geographically diversified with a large portfolio of businesses across both regulated and developing markets, with the scale and resources to address the dynamics of a rapidly changing global industry. Any transaction would also enhance the enlarged group’s position in a number of the world’s largest regulated online gaming markets, including the UK, Italy and Australia, and would significantly increase GVC’s current share of revenues from locally regulated/taxed markets to more than 90 percent. The enlarged group would have strong growth prospects with momentum in its online businesses, potential for material synergies including the use of leading proprietary technology, and the opportunity to select the best of both people and operations.”