GVC, Ladbrokes Coral deal could be done this month - report

9 October 2017

A multibillion-pound merger between GVC and Ladbrokes Coral could be finalised as soon as this month in a move that could trigger a wave of fresh M&A deals across the industry.

The Financial Times newspaper reports that the two companies are further towards completing a deal than previously known.

The newspaper believes Ladbrokes Coral and GVC have already agreed on the shape of a new executive team and board.

The merger, which would coincide with the outcome of a UK regulatory review due this month, could inspire rivals to combine as they bid to prevent losing market share.

William Hill, Paddy Power Betfair, The Stars Group, 888 Holdings, Rank Group and Jackpotjoy have all reportedly drawn up their own battle plans.

“After the review, it won’t be the commencement of talks, it will be the continuation of them,” David Jennings, head of leisure research at Davy, the Irish wealth managers, told the Financial Times.

In August, the Financial Times revealed that GVC had offered up to £3.6bn (€4.0bn/$4.7bn) to take over Ladbrokes, but negotiations collapsed and Kenny Alexander, GVC’s chief executive, has said he will not consider any deal until after the review.

Last month GVC revealed double-digit revenue and earnings growth in the first six months of 2017 up to June 30.

In releasing its results GVC indicated a desire to seek more acquisitions, after last year taking over Bwin in £1.1bn deal that sent the firm into the FTSE 250.

Alexander said: “Strategically, the organic growth potential remains exciting and through further product development and increased marketing investment we are well placed to pursue these opportunities.

“However, we operate in an industry where regulation and increased taxation present headwinds and these are best addressed through scale and diversification. The combination of our people, proprietary technology and proven M&A track record, means GVC is well positioned to play a significant role in the industry's ongoing consolidation.”

Related article: GVC's revenue growth inspires further acquisitions