Royals’ favourite bookie to be sold to Foxy Bingo
The world’s oldest bookmaker looks set to be bought by an online upstart based in the Isle of Man, for up to £3.9bn.
Ladbrokes Coral, which dates back to 1886 and was known as the Queen Mother’s favourite bookie, is in talks about a possible takeover by Foxy Bingo owner GVC holdings.
The final price will depend on the outcome of the Government review into fixed-odds betting terminals – dubbed the crack- cocaine of gambling because they are so addictive.
If ministers cut the maximum bet on the machines from the current £100 to £2, GVC will pay £3.1bn for Ladbrokes Coral, while the price will rise to £3.9bn if the cap is reduced to £50.
Ladbrokes Coral shares jumped 29pc while GVC gained 5pc. William hill was also on the rise, up 8.1pc, as investors bet on further consolidation in the industry.
The proposed deal – following on-off talks between the two over the past year – came just 24 hours after shopping centre owners hammerson and Intu unveiled plans to join forces and create a £21bn property empire.
The flurry of takeover activity looks set to trigger a fees bonanza for City advisers.
A tie-up between Ladbrokes Coral and GVC would create a £6.8bn giant that would dwarf rivals including William hill, Bet365 and Paddy Power Betfair.
GVC, which was set up in 2004 and only made the leap from AIM to the FTSe 250 last year, already owns brands including Sportingbet, Bwin, Party Poker and Foxy Casino. But a takeover of more than 3,500 betting shops would be its biggest deal yet and mark a major milestone for online gaming tycoon Kenny Alexander.
The 48-year-old Scot has built GVC into a £3bn titan through acquisitions since becoming chief executive in 2007, and will keep the top job if the deal goes through. he was paid £19.5m last year and owns GVC shares worth £18m. But the takeover would spell the end for Ladbrokes Coral chief executive Jim Mullen, who oversaw the £2.3bn merger of Ladbrokes and Coral last year and has long warned of further consolidation in the industry.
Noting the rise in share prices, Mullen, 47, who was paid £1.3m last year and could net a windfall of up to £4.6m, said: ‘The market has spoken. This deal is great for both sets of shareholders.’
Morgan Stanley analyst ed Young said the combined group could make savings of up to £100m a year.
‘ We think the combination makes sound strategic sense,’ he said. ‘It would create a more diversified group.’
But Barclays’ Patrick Coffey said: ‘The biggest risk is that the technology integration reduces the focus on new product development. A large-scale technology integration will be fraught with potential challenges.’