Majority of shareholders OK’d big deal
Irish billionaire Dermot Desmond’s attack on the merger of British bookie Ladbrokes with Gala-Coral recently prompted Ladbrokes’ board to defend the plan, saying it has “compelling strategic rationale and benefits” for the firm and its shareholders.
According to Ladbrokes, Desmond’s reservations were not shared by 96.4 percent of shareholders who voted in favor of the merger last week.
Desmond, who reportedly holds a 1 percent to 2.8 percent stake in Ladbrokes, said the winners in this deal would be Coral’s owners, “who will receive access to liquidity for their shares and significant relief from a £2.2 billion (US$3.3 billion) debt burden. According to Ladbrokes, however, the partnership will speed online and international growth; create significant cost synergies; and give Lads the ability to operate across an enhanced and integrated technology platform, SBC reported.
Desmond promises to fight on. “If it’s a 15-round battle, it’s only the first round,” he said. “This is only a start.” According to Bloomberg News, he said he would “very easily” rally the 5 percent needed to call an extraordinary meeting to overturn the merger. “We can call it immediately in relation to our confidence in the board.”
Ranked by the Sunday Independent as the eighth- richest person in Ireland, Desmond has also questioned the payment of ?75 million (US$113 million) to Playtech Plc., Ladbrokes’ gaming software partner, as condition of the merger.
But he directed most of his ire at Lads Chairman Peter Erskine, who will soon step down, and John Kelly, founder and former chief executive of the Gala Coral Group and now a senior non-executive director for Ladbrokes. Desmond, who sold the Betdaq betting exchange to Ladbrokes in 2013, says the merger could require up to 1,000 betting shops to be sold or closed to meet antitrust concerns. That could mean as much as ?70 million pounds in lost earnings, Desmond said.
Desmond’s stance was ridiculed by Richard Buxton, chief executive of Old Mutual Global Investors, Ladbrokes’ third biggest shareholder, reported the UK Daily Telegraph. He said Desmond’s concerns were “late in the day” and “wishy-washy.”
