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Gala Coral Group and Ladbrokes in initial merger discussions

24 June 2015

Gaming operators Ladbrokes and Gala Coral announced on Monday that they are in initial merger discussions. The proposed merger would consist of Ladbrokes and Gala Coral Group operated Coral Retail, Eurobet Retail and the respective online businesses. While discussions are yet to exceed advance stages, there remains the matter of corporate structure and a deal price. Ladbrokes advised that there is no certainty that the discussions would lead to a deal outcome, however the gaming operator mentioned that the proposed merger would place the new group on the main market of the London Stock Exchange and could offer a combined shares ratio and boost revenue standings.

Ladbrokes chief executive officer, Jim Mullen commented saying: “Since becoming chief executive officer 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. 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.”

Gala Coral Group commented saying: “Gala Coral Group believes that a merger with Ladbrokes has the potential to be strongly value accretive for both companies’ shareholders. Under the leadership of the current management team, Gala Coral Group has executed a successful turnaround which has delivered continuing strong growth. The company and its shareholders are evaluating all strategic options, including a possible initial public offering. There can be no certainty that the discussions between Ladbrokes and Gala Coral Group will lead to any agreement and Gala Coral Group remains confident in its future as a standalone business with highly attractive future potential.”

In 1998 Ladbrokes attempted to acquire Gala Coral Group, however their deal efforts was blocked by secretary of trade Peter Mandelson due to disadvantage competition in the market. If the deal is successful it will see the merged group take over William Hill and become the biggest UK bookmaker with Ladbrokes 2,100 shops and 1,845 from Gala Coral, consolidating the United Kingdom gambling industry with a phenomenal growth in mobile gambling and sports betting.

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