Ladbrokes’ proposed merger with Coral has moved a step closer after the London-listed operator’s shareholders voted almost unanimously in favour of the deal at the company's General Meeting today (November 24th).
The General Meeting saw 96.36 per cent of votes - 765,895,851 – cast in favour of the merger, which will see Coral Retail, Eurobet Retail and Gala Coral’s online businesses combine with Ladbrokes’ businesses to establish the £2.3bn gaming giant Ladbrokes Coral. Just 3.64 per cent (28,966,040) voted against the deal and only 3,387,452 votes were withheld.
A number of other motions, including authorising the new entity’s directors to allot shares; approving the waiver granted by the takeover panel for a mandatory offer obligation for the issuing of shares; and a mandatory share buy-back to be completed after the deal, were also passed. Each also secured more than 90 per cent of all votes cast.
Gala Coral chairman Rob Templeman said he was pleased that Ladbrokes had secured shareholder support for the proposed merger.
“This is a very important milestone in the process and reflects the compelling logic of combining our businesses,” he explained. “Both Ladbrokes and Gala Coral continue to work constructively with the Competition and Markets Authority and a further update will be provided in due course.”
Agreed in July this year, the merger is projected to create a business that will generate annual revenue of £2.1bn, with EBITDA of £392m.
It will be led by current Ladbrokes chief executive Jim Mullen, supported by Gala Coral chief financial Paul Bowtell and chief operating officer Andy Hornby. Current Gala Coral CEO Carl Leaver will serve as executive deputy chairman, with Ladbrokes’ senior non-executive director John Kelly becoming non-executive chairman and Templeman appointed a non-executive director.
However the merger has been attacked by Ladbrokes minority shareholder Dermot Desmond. The 1 per cent stakeholder had derided the deal as a reverse takeover and “effectively the death of Ladbrokes as an independent company.”
Desmond believes that the transaction effectively puts the operator in the hands of Coral’s private equity owners, allowing them to relieve their debt burden.
“Make no mistake – this is a zero premium acquisition of Ladbrokes by Coral as reflected by share price decline since the deal was announced,” he explained.
The UK Competition and Markets Authority (CMA) is now likely to begin a review of the merger, which is expected to see the new business forced to sell off some of its retail estate, which will be 4,000 strong once the deal is completed.