Lads and Gala Coral set autumn merger date
Gala Coral CEO Carl Leaver says combination with Ladbrokes likely to take place in September or October
The merger between Ladbrokes and Gala Coral will likely take place this autumn following news the companies must first sell between 350-400 shops to proceed, according to Gala Coral chief executive Carl Leaver.
Writing to staff today, Leaver said he expected the deal would complete in “September/October”, while a spokesperson for Ladbrokes told EGR it anticipated an “end of Q3, start of Q4” merger date.
In its provisional findings published earlier today, the UK Competition and Markets Authority (CMA) said the merger could create a significant lessening of competition in 659 areas and therefore the two firms would need to dispose of around 375 shop between them to remedy the situation.
Ladbrokes said it was now focused on the disposal of the required number of shops with the CMA having said the companies must sell a “substantial” number ahead of merger completion – the shops must be sold and not closed.
The likes of Paddy Power, BoyleSports and Betfred have all been mentioned as potential suitors and Betfred owner Fred Done this morning told EGR he was keen to extend Betfred’s retail presence through the acquisition the Ladbrokes and Coral shops.
“Of course we are interested in the shops, I’m ready to talk,” Done said.
Meanwhile Cenkos Securities analyst Simon French said he was surprised by the relatively low number of shops to be sold – some had estimated as many as 1,000 would need to go in order to smooth the path to a merger.
“We are pleasantly surprised by what we regard as the low number of shop disposals required by the CMA,” French said.
“Attention will now focus on the likely price achievable for the shops to be disposed of with proceeds likely to be in the range of c?100-150m we believe, given the lack of obvious buyers and the potential difficulty of raising debt finance given the uncertainty around the sustainability of machine income,” he added.
While the CMA has extended its investigation into the merger until 19 August, a final decision is expected to be announced in July. The CMA said it would accept responses and alternative remedy solutions from stakeholders up until 6 June.