Ladbrokes Coral and GVC in talks for potential acquisition
Gambling companies Ladbrokes Coral and GVC have announced they are in detailed discussions regarding the possible combining of the two businesses.
This follows the receipt by Ladbrokes Coral of a non-binding proposal from GVC regarding a possible offer for the entire issued and to be issued share capital of Ladbrokes Coral.
It is expected that the potential offer would be structured as a scheme of arrangement pursuant to which GVC would acquire the entire issued, as well as being issued ordinary share capital of Ladbrokes Coral.
Under the terms of the offer, Ladbrokes Coral shareholders would be entitled to 32.7p in cash and 0.141 ordinary GVC shares for each Ladbrokes Coral share, and a potential further value of up to 42.8p structured as a contingent value right.
Based on the Ladbrokes Coral and GVC share prices as at the close of business on December 6, 2017, the potential offer values Ladbrokes Coral at 160.9p per Ladbrokes Coral share, equating to a total equity value of £3.1bn.
It is said the offer could include a mix and match facility allowing Ladbrokes Coral shareholders the opportunity to elect to receive more cash or more new ordinary shares in GVC. But this is subject to offsetting elections made by other Ladbrokes Coral shareholders.
The boards anticipate that Ladbrokes Coral shareholders would hold c.46.5 per cent, and GVC shareholders would hold c.53.5 per cent of the issued and to be issued share capital of the enlarged group.
Whilst the determination of the senior management positions will be finalised by the parties over the coming weeks, it has been agreed by the parties that Kenneth Alexander would be the CEO of the enlarged group should the transaction proceed to completion.
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.
Furthermore, it would have a large portfolio of businesses in different locations across both regulated and developing markets, with the scale and resources to address the dynamics of a rapidly changing global industry.
A formal announcement of an offer remains conditional on agreement on the other terms and conditions of the possible offer, satisfactory completion of customary due diligence and final approval by the Boards.
The parties reserve the right to waive any or all of these preconditions, although GVC is required, by January 4, 2018, either to announce a firm intention to make an offer for Ladbrokes Coral or conclude that it does not intend to make an offer.
The deadline can be extended. Ladbrokes Coral and/or GVC will make a further announcement in due course.