LONDON: Ladbrokes and Gala Coral are in merger talks to create Britain’s largest bookmaker by number of betting shops.
The talks, which are at an early stage, would give the combined company more than 4,000 shops and make it a bigger player in the increasingly important online market. William Hill has the most shops now with almost 2,400.
If completed, the deal would be structured as a takeover of publicly traded Ladbrokes by Coral, which is owned by private equity firms. The combined company would then apply to list its shares on the London Stock Exchange. Shares in Ladbrokes jumped 10% to 135p on news of the talks.
Jim Mullen, Ladbrokes chief executive, was appointed three months ago to shake up the company, which has struggled to compete in a betting market transformed by online gambling. He was due to set out his plans to shareholders next week but that presentation may now be put on hold depending on how talks with Coral proceed.
Mullen said: “Since becoming CEO my focus has been on a more aggressive plan to build digital scale and grow our recreational customer base across all channels, which is key to creating a more sustainable and growing Ladbrokes. My plans are well advanced and I look forward to presenting them to shareholders.
A merger with Gala Coral could create a combined business with significant scale and has the potential to generate substantial cost synergies, creating value for both companies’ shareholders.”
Mullen will be the chief executive of the combined company. He said the board had not yet decided whether a merger with Coral was the right strategic move at the right price. If the merger goes ahead, the combined company could sell new shares to investors to strengthen its balance sheet.
