Why Not? GVC linked to Ladbrokes Coral takeover

The City of London has registered speculation that newly merged Ladbrokes Coral Plc is a potential takeover target of FTSE rival GVC Holdings.

Last Friday the Financial Times reported that Ladbrokes Coral shares had gained circa 5% value on the speculation that GVC governance were considering an ambitious reverse takeover of the betting giant valued at a reported £3.2 billion (representing 30% premium).

GVC governance are reported to have asked its advisors to put together a proposal for the reverse takeover of Ladbrokes Coral assets, similar to the firm’s successful £1.1 billion takeover of bwin.party Entertainment (deal completed December 2015).

The governances of both Ladbrokes Coral and GVC have made no comment on the takeover rumours. However, industry commentators appear to be cold on the prospects of yet more industry consolidation as both operators enter periods of corporate restructuring and integration following their respective mergers.

Furthermore, last week the Financial Times reported that GVC Chief Executive Kenneth Alexander had turned down a leadership approach by a desperate William Hill, stating that the CEO had rejected Hill’s approach as he was committed to successfully merging GVC and bwin.party assets.

Pouring more cold water on the takeover speculation is Ladbrokes Coral’s known interest in expanding its footprint internationally. Last month the operator was at the centre of speculation relating to a potential acquisition approach for leading Australian gambling operator Tabcorp for a reported £2 billion.