The UK’s Competition and Markets Authority (CMA) is investigating the proposed acquisition of Ladbrokes Coral by GVC Holdings.

GVC agreed terms last December to acquire the London-listed operator last December, with the recommended offer seeing Ladbrokes Coral shareholders receive £0.327 in cash, 0.141 ordinary GVC shares and a contingent entitlement of up to a further £0.428 plus a contingent value right, for each Ladbrokes Coral share.

The contingent value right (CVR) takes into account the UK’s Triennial Review and its potential impact on machine stake levels, and could see the contingent entitlement value drop to zero.

As a result, the transaction value will be in the region of £3.2bn and £4.0bn, with Ladbrokes Coral shareholders holding approximately 46.5 per cent of the enlarged group.

In a statement Wednesday the CMA said it was considering whether the transaction, if carried into effect, would result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002.

In addition, the CMA will consider whether the creation of that situation may be expected to result in a “substantial lessening” of competition within any market or markets in the UK for goods or services.

The CMA has asked for written representations about any competition or public interest by February 21st.

The deadline for the CMA to announce any decision whether to refer the merger for a Phase 2 investigation will be April 6th.

Shares in Ladbrokes Coral Group plc (LSE:LCL) were trading at 160.85 pence per share in London Thursday morning.