Bookmaker Ladbrokes is in talks with Gala Coral about a merger that would see it betting against the sector‘s biggest player William Hill. Ladbrokes said there‘s no guarantee that the talks would lead to a deal, and any possible terms and timings were also yet to be agreed.
Earlier this year Ladbrokes said it will close 60 UK shops after a big fall in 2014 pre-tax profit .
If the deal goes ahead, it could be classed as a reverse takeover of Ladbrokes which previously attempted to buy Coral in 1998 before being stopped by the government, who disputed the acquisition, citing that it would lead to “a weakening of price competition at the national level” as a well as a reduction in consumer choice.
If merged Ladbrokes and Gala Coral, Britain‘s second and third largest bookmakers, would be able to push their digital businesses, which is becoming increasingly important as consumers opt to bet with mobile phones and tablets rather than in-store.
“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,” Mullen said on Monday night.
“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.”
“The board has not yet concluded whether a transaction is strategically attractive and can be delivered to shareholders on appropriate terms,” he added.