Irish subsidiary emerges from court protection
UK bookmakers Ladbrokes and Gala Coral, which have merged to form the nation’s biggest retail bookmaker with 4,000 outlets, may be required to sell off some of its assets to avoid monopoly concerns.
The merger must undergo scrutiny by the country’s Competition and Markets Authority. According to SBC News, Irish betting operators Paddy Power and Boylesports are also looking at the new company’s retail inventory in order to expand their own UK services and market presence.
Both companies operate extensively in the UK, and international operations will initially account for only about 11 percent of the merged company’s total revenue.
According to published reports, the two firms will combine their digital innovation teams in order to strengthen products, but the firms intend to maintain two trading teams and allow for independent pricing of events and offers.
Ladbrokes CEO Jim Mullen will serve as CEO of the merged company and Gala Coral CEO Carl Leaver will serve as executive deputy chairman for a 12-month period.
Leaver said his primary responsibility will be to realize synergies from the merger, which he expects will be about £65m, most of that coming in the second year following the merger, which the companies expect to conclude mid-2016.
As a result of the merger, reports the Irish Independent, Ladbrokes will close 51 of its 196 bookies in Eire and lay off 90 or 840 employees. The Irish arm of Ladbrokes, which had sought court protection, is now back in the black with around €3.8 million (US$4.1 million) to pay off debts, along with additional millions in working capital and money for capital expenditure purposes.
Preferential creditors will be paid off in full while the dividend for trade creditors will be 89 percent and for landlords 19 percent, according to the court. Almost all unsecured creditors voted in favor of the scheme, reported the Independent. Out of 80, only one voted against, counsel said; if the company had been sold, preferential creditors would have received 90 percent of what they are owed while landlord and trade creditors would have received nothing.
“This is a major strategic step for Ladbrokes,” said Mullen, who joined the company in May. “Together, we will create a leading betting and gaming business combining strong brands with an attractive multi-channel offering and an extensive national and international coverage.”
Ladbrokes said it would issue new shares to existing Gala Coral investors representing 48.25 percent of the enlarged group, with Ladbrokes shareholders owning the rest, according to a news release. The new firm will be named Ladbrokes Coral.
