Bankers pocket £111m as Foxy Bingo buys Ladbrokes

But 1,600 staff will lose their jobs

BANKERS will make £111m but up to 1,600 staff will lose their jobs when a £4bn takeover of the Queen’s gambling firm Ladbrokes Coral goes ahead, it emerged last night.

GVC Holdings, the Isle of Man based owner of Foxy Bingo, is buying Ladbrokes in a deal that will see City firms split a £111m fees bonanza and hand executives up to £12m.

Among those who will scoop a major payday will be Ladbrokes’ 49-year-old chief executive Jim Mullen, who could make as much as £7.1m.

Meanwhile, some of the City’s biggest investment houses, such as UBS and German-owned Deutsche Bank, will make £24m.

Another who will make a major killing on the deal will be Andy Hornby, the disgraced ex-boss of failed bank HBOS. The 50-year-old is chief operating officer at Ladbrokes Coral and will be tasked with running the merged firm’s 3,500-plus betting shops in the UK.

As Hornby is not a board member, the terms of his employment have not been revealed – but he is expected to get more than £1m a year in total.

And he will make up to £10m from his stake in the company if the deal goes through.

However, while they all enjoy bumper paydays, owners are plotting to save £100m a year through the deal, and last night official paperwork outlining the takeover said 6pc of the combined group’s 26,800-strong workforce could face the axe.

The biggest chunk of the cost cuts is a £44m saving from sharing technology, with another £30m to come from combining their trading, customer services, marketing and head office staff.

Both companies said that in order to benefit from the deal, ‘operational restructuring of both GVC and Ladbrokes Coral is likely to be required’ – and this will mean job losses.

However, sources stressed there are no plans to save money by closing betting shops – meaning that most High Street staff will not be affected.

Bankers, lawyers and spin doctors will pocket millions if the mega-merger clears regulatory hurdles.

GVC will dole out £87.2m to its advisers – with £54.6m going to its lead broker Investec and other financiers.

The buyer’s lawyers will get £2.8m and its public relations agency is to be handed £1m. Ladbrokes’ advisers, including UBS and Deutsche Bank, will pocket £24.3m.

Ladbrokes finance head Paul Bowtell is staying with the business after it is taken over and will get a base salary and pension contributions worth £656,000, with bonuses on top.

He also has up to £1.4m coming his way thanks to Ladbrokes Coral’s bonus schemes, which pay out if certain targets are hit. And Bowtell owns shares outright which are worth up to £3.6m under the terms of the deal, meaning he can expect to get a maximum of £5m if it goes through.

Chief executive Mullen is leaving with bonus payments of up to £6m, and a year’s salary, pension and benefits expected to come to more than £800,000.

He already owns stock worth up to £276,000, for a total possible pay-out of up to £7.1m.

A Ladbrokes spokesman said yesterday: ‘These are maximum payouts that are highly unlikely to apply. We are confident he will be rewarded fairly, not excessively.

‘I would be willing to strike a decent bet that it will not be at that level.’

The total amount payable to shareholders is up to £3.9bn, but depends on the outcome of a crackdown on lucrative fixedodds betting terminals which are dubbed by critics as the ‘crack cocaine’ of gambling. If ministers take a robust view, shareholders will get as much as £800m less than if they are more relaxed about the terminals.

Ladbrokes Coral announced that last year’s profits are at the top end of expectations, and announced a surprise second interim dividend of 4p per share.

Ladbrokes shares rose 0.5pc, or 0.85p, to 160.7p yesterday.