GVC is set to buy Ladbrokes Coral in a game-changing deal for the UK betting industry.
Should the acquisition go ahead, shareholders in GVC – which owns the Bwin, Sportingbet and Foxy Bingo brands – will hold 53.5 percent of the combined group.
Ladbrokes Coral chair John Kelly said: “Ladbrokes Coral board believes that the proposed combination with GVC accelerates our strategy to improve the customer experience, drive faster online growth and build a more diverse and extensive international portfolio of businesses.”
The move comes after the government said it would put a yet-to-be-decided cap on stakes for FOBT machines, which companies like Ladbrokes Coral rely on for profits.
Ministers have proposed that bets on the machines should be cut from a maximum of £100 a spin to a figure between £2 and £50.
While the final value of the purchase could be worth £4bn, it will be dependent on the government’s decision on maximum stakes.
Under the terms of the deal, for each share that Ladbrokes Coral shareholders own, they will get 32.7p in cash and 0.141 ordinary GVC shares, plus a “contingent value right” worth up to 42.8p.
While the two companies only began “detailed discussions” last month, it understood that GVC expressed interest to buy after Ladbrokes and Coral agreed to merge in 2016