Shares in both companies have jumped with news they are in "detailed" takeover talks which value Ladbrokes Coral at up to £3.9bn.
Companies: Entain PLC, Ladbrokes Coral Group
Ladbrokes Coral (LON: LAD) and GVC (LON: GVC) have announced today they are in "detailed" talks over a takeover bid which values the High Street gambling giant at up to £3.9bn.
The takeover proposal would entitle shareholders of LAD 32.7p in cash and 0.141 shares in GVC, with the potential for a further 42.8p. This is dependant on a government review of fixed-odds betting on the High Street and its subsequent impact on Ladbrokes Coral profits.
Fixed Odds Betting Terminals (FOBTs) have come under scrutiny recently, being labelled "the crack cocaine of gambling" by a group of cross-party MPs due to their addictive nature. The MPs called for the maximum bet on the machines to be reduced from £100 pounds to between £2 and 350 to protect "society's most vulnerable".
Shares in Ladbrokes Coral jumped 25% whilst shares in GVC, the Group behind Bwin and Sporting Bet, jumped 4% off the back of the statement.
News of the possible takeover first surfaced in 2016, not long after Ladbrokes merged with Coral and again in August this year but both talks broke down soon after they were announced.
Should the deal finalise, it will create one of the world's largest gambling companies whilst being "double-digit EPS accretive from the first full year post-completion".
It has been agreed GVC Chief Executive Ken Alexander would become CEO of the enlarged Group, which would become:
"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."
