The Competition and Markets Authority (CMA) has given the green light to the Ladbrokes Coral GVC deal after the competitions watchdog said “the deal does not give rise to competition concerns”.
It added that they are not close rivals and there are many other providers of betting and gaming services online”.
The CMA said its probe “looked closely at betting services for individual sports and individual games but found that, in all cases, there will be enough rivals to the merged entity to prevent price increases or a reduced quality of service as a result of the merger”.
With the rubber stamp the deal which will see GVC take a 53% controlling stake in the betting firm with GVC Chief Executive Kenneth Alexander taking the top job.
At present the takeover deal is valued at £3.2 billion but will rise with add-ons and performance. It was only last November Ladbrokes acquired Gala Coral in a £2.3 billion merger now GVC is moving in to take control of them both.
GVC and Ladbrokes Coral believe the tie-up will help make £100 million a year in cost cutting helping to improve shareholder value. Ladbrokes Coral has over 25,000 employees working in retail and online and GVC has 2,800 employees in Europe and globally for its online brands.
Showing posts with label Gala Coral. Show all posts
Showing posts with label Gala Coral. Show all posts
March 22, 2018
November 03, 2017
GVC drops Turkey operations amid merger rumor with Lads Coral
UK-listed online gambling operator GVC Holdings has disposed of its Turkish-facing business, fueling speculations that it will once again attempt to acquire UK rival Ladbrokes Coral Group.
In a regulatory filing, GVC announced that it sold Headlong Limited to Ropso Malta Ltd., a company backed by investors who run the operation’s IT, for €150 million ($174.9 million).
Headlong accounts for 9 percent of GVC’s net gaming revenues. The Turkish-facing company and its associated business had gross assets of €21 million ($24.47 million) as of December 31, 2016 while its estimated earnings before interest, tax, depreciation, and amortization totalled €35 million ($40.77 million).
GVC drops Turkey operations amid merger rumor with Lads CoralBoth GVC and Ropso Malta agreed that the payment will be payable on a monthly basis and in a span of five years. They also agreed that transitional service arrangements will take place for no longer than six months following the completion.
With the disposal of Headlong, GVC’s revenue from “grey” markets will fall to around 25 percent.
“The decision to sell Headlong and associated businesses has been taken against a backdrop where, in an increasingly maturing and regulating online gaming world, the Board has concluded it is now appropriate for GVC to further increase its focus on regulated markets,” GVC said in a statement. “In addition, the Board believes that the Disposal will increase the attractiveness of the Group to investors and potential consolidation partners.”
The sale of Headlong, however, has revived rumors that GVC is attempting to acquire Ladbrokes for the third time since last year, according to The Evening Standard.
One of the contentious issues that both GVC and Ladbrokes are reportedly trying to iron out is the former’s businesses in unregulated markets like Turkey. Though profitable, unregulated markets are unstable and subject to sudden clampdowns.
Ladbrokes is basically telling GVC that if the company wants a marriage, then the former has to say bye-bye to unregulated markets.
In a regulatory filing, GVC announced that it sold Headlong Limited to Ropso Malta Ltd., a company backed by investors who run the operation’s IT, for €150 million ($174.9 million).
Headlong accounts for 9 percent of GVC’s net gaming revenues. The Turkish-facing company and its associated business had gross assets of €21 million ($24.47 million) as of December 31, 2016 while its estimated earnings before interest, tax, depreciation, and amortization totalled €35 million ($40.77 million).
GVC drops Turkey operations amid merger rumor with Lads CoralBoth GVC and Ropso Malta agreed that the payment will be payable on a monthly basis and in a span of five years. They also agreed that transitional service arrangements will take place for no longer than six months following the completion.
With the disposal of Headlong, GVC’s revenue from “grey” markets will fall to around 25 percent.
“The decision to sell Headlong and associated businesses has been taken against a backdrop where, in an increasingly maturing and regulating online gaming world, the Board has concluded it is now appropriate for GVC to further increase its focus on regulated markets,” GVC said in a statement. “In addition, the Board believes that the Disposal will increase the attractiveness of the Group to investors and potential consolidation partners.”
The sale of Headlong, however, has revived rumors that GVC is attempting to acquire Ladbrokes for the third time since last year, according to The Evening Standard.
One of the contentious issues that both GVC and Ladbrokes are reportedly trying to iron out is the former’s businesses in unregulated markets like Turkey. Though profitable, unregulated markets are unstable and subject to sudden clampdowns.
Ladbrokes is basically telling GVC that if the company wants a marriage, then the former has to say bye-bye to unregulated markets.
October 18, 2016
Ladbrokes Coral’s ‘disappointing’ shops sale
Ladbrokes Coral was busy celebrating on Monday overcoming the “last significant hurdle” to its merger agreement. But the news that the company could only fetch £55.5m for the combined parcel of 359 shops it has offloaded to Betfred and Stan James will likely send shudders throughout the sector.
The shops sale was mandated by the Competition and Markets Authority (CMA) in the summer which said between 350 and 400 outlets needed to be sold in order to satisfy local competition issues from the merging of the two estates.
The disposal will see Betfred pick up 322 shops for a total of £55m while Stan James will pick up the rump of 37 shops for £0.5m. It leaves the Ladbrokes Coral combination with a total of 3,626, the largest estate in the UK, pushing William Hill into second place with 2,330 and with Betfred now rising to 1,688.
The shops in question generated an EBITDA contribution of £28.5m which translates to a multiple of around 2.2 times and analysts were quick to brand the price-tag as disappointing. Richard Stuber at Numis said he had previously pencilled in proceeds of circa £108m, based partly on speculation in the press that Boylesports would be willing to pay around £100m for the parcel.
Indeed, Gala Coral chief executive Carl leaver hinted that other bidders might have been willing to pay more for the shops but Ladbrokes Coral had opted for certainty in order to get the deal over the line and move towards final CMA clearance.
But as Paul Leyland, founder at gambling consultancy Regulus Partners, said the low multiple still reflects the long-term earnings decline at the high-street bookmakers and the potential impact of the Triennial Review of gaming machine stakes and prizes which is likely to be officially announced by the government within weeks.
The news of the divestment sent the analysts back to the drawing board with their valuations for high-street bookmakers. Simon French at Cenkos said the “very disappointing valuation” achieved or these shops “must raise significant questions over the appropriate medium-term multiple with which to value both the enlarged Ladbrokes Coral retail estate and that within William Hill”.
Stuber at Numis said the “risk to future retail cash flows has clearly increased over last few months”.
Although he said he appreciated the forced nature of the sale and cautioned that it couldn’t give a read-across the entire estate, he said it would be prudent to cut its valuation of the combined group’s high-street business from nearly six times EBITDA to a multiple of four times.
The news that it was Betfred and Stan James that had won the race for these divested shops will no doubt be a disappointment to many, including the failed bidders and other interested parties such as the British Horseracing Authority which had lobbied the CMA to ensure true competition by allowing for a new competitor to enter the high street.
As Leyland from Regulus said: “The divestment to two established UK high-street operators will no doubt satisfy the CMA requirement that the acquirers must be qualified. However, it also means that the merger will not create a challenger brand, nor is it likely to drive material change within the (increasingly stale) offer available to British licensed betting office customers, in our view.”
The shops sale was mandated by the Competition and Markets Authority (CMA) in the summer which said between 350 and 400 outlets needed to be sold in order to satisfy local competition issues from the merging of the two estates.
The disposal will see Betfred pick up 322 shops for a total of £55m while Stan James will pick up the rump of 37 shops for £0.5m. It leaves the Ladbrokes Coral combination with a total of 3,626, the largest estate in the UK, pushing William Hill into second place with 2,330 and with Betfred now rising to 1,688.
The shops in question generated an EBITDA contribution of £28.5m which translates to a multiple of around 2.2 times and analysts were quick to brand the price-tag as disappointing. Richard Stuber at Numis said he had previously pencilled in proceeds of circa £108m, based partly on speculation in the press that Boylesports would be willing to pay around £100m for the parcel.
Indeed, Gala Coral chief executive Carl leaver hinted that other bidders might have been willing to pay more for the shops but Ladbrokes Coral had opted for certainty in order to get the deal over the line and move towards final CMA clearance.
But as Paul Leyland, founder at gambling consultancy Regulus Partners, said the low multiple still reflects the long-term earnings decline at the high-street bookmakers and the potential impact of the Triennial Review of gaming machine stakes and prizes which is likely to be officially announced by the government within weeks.
The news of the divestment sent the analysts back to the drawing board with their valuations for high-street bookmakers. Simon French at Cenkos said the “very disappointing valuation” achieved or these shops “must raise significant questions over the appropriate medium-term multiple with which to value both the enlarged Ladbrokes Coral retail estate and that within William Hill”.
Stuber at Numis said the “risk to future retail cash flows has clearly increased over last few months”.
Although he said he appreciated the forced nature of the sale and cautioned that it couldn’t give a read-across the entire estate, he said it would be prudent to cut its valuation of the combined group’s high-street business from nearly six times EBITDA to a multiple of four times.
The news that it was Betfred and Stan James that had won the race for these divested shops will no doubt be a disappointment to many, including the failed bidders and other interested parties such as the British Horseracing Authority which had lobbied the CMA to ensure true competition by allowing for a new competitor to enter the high street.
As Leyland from Regulus said: “The divestment to two established UK high-street operators will no doubt satisfy the CMA requirement that the acquirers must be qualified. However, it also means that the merger will not create a challenger brand, nor is it likely to drive material change within the (increasingly stale) offer available to British licensed betting office customers, in our view.”
July 14, 2016
Betfred the favourite in race for Ladbrokes and Coral shops
The Sunday Times has reported that Betfred is nearing a deal to buy hundreds of betting shops, as the Ladbrokes-Coral merger enters the final stages of its UK Competition and Markets Authority (CMA) review.
As part of its merger completion, Ladbrokes-Coral has been forced to sell a significant number of betting shops in order to secure UK competition approval and close its £2.3 billion merger (first announced – June 2015).
In May the UK markets authority had ordered Ladbrokes and Coral governances to begin to sell off a number of its retail assets as its review had identified +600 areas across the UK where the merger could harm competition.
Manchester-based Betfred, Britain’s fourth largest highstreet bookmaker with a retail portfolio of 1400 shops, is reported to be willing to buy between 300-400 of Ladbrokes-Coral’s inventory.
The Sunday Times reports that led by Founder Fred Done, Betfred’s retail bid had edged out Irish competitor BoyleSports, whose founder John Boyle had viewed the retail sell-off of the Ladbrokes-Coral merger as an easy way of expanding BoyleSports in the highly saturated UK betting market.
The move by Betfred to increase significantly its retail betting portfolio may surprise some industry analysts. Filing its annual return for 2015 this month the bookmaker reported losses of £76 million.
Betfred governance stated that a tough 2015 had seen its operations readjust to new industry taxes with lower revenue margins.
As part of its merger completion, Ladbrokes-Coral has been forced to sell a significant number of betting shops in order to secure UK competition approval and close its £2.3 billion merger (first announced – June 2015).
In May the UK markets authority had ordered Ladbrokes and Coral governances to begin to sell off a number of its retail assets as its review had identified +600 areas across the UK where the merger could harm competition.
Manchester-based Betfred, Britain’s fourth largest highstreet bookmaker with a retail portfolio of 1400 shops, is reported to be willing to buy between 300-400 of Ladbrokes-Coral’s inventory.
The Sunday Times reports that led by Founder Fred Done, Betfred’s retail bid had edged out Irish competitor BoyleSports, whose founder John Boyle had viewed the retail sell-off of the Ladbrokes-Coral merger as an easy way of expanding BoyleSports in the highly saturated UK betting market.
The move by Betfred to increase significantly its retail betting portfolio may surprise some industry analysts. Filing its annual return for 2015 this month the bookmaker reported losses of £76 million.
Betfred governance stated that a tough 2015 had seen its operations readjust to new industry taxes with lower revenue margins.
June 08, 2016
Gala Coral stumbles into the red ahead of Ladbrokes merger
Betting giant Gala Coral swung into the red in the first six months of the year, posting a loss of £49.8m despite a slight rise in revenues.
This compares to a profit of £103.4m during the same period last year. Last year's earnings were artificially inflated by an extra £158.5m generated from asset disposals.
The company was at pains to refer to the more rosy earnings before profit, tax and other considerations figure in its filings, which shows a rise in income of 16pc.
It also offered investors another figure that strips out the effects of regulation, suggesting a revised Ebitda rise of 43pc.
The company is currently awaiting regulatory approval for its merger with rival Ladbrokes.
Gala Coral blamed Cheltenham festival, which was "the worst for the industry since 2003", for the poor results.
Operating expenses jumped by 67pc to £318.8m, a rise the company attributed to salary increases and the cost of training staff to spot customers with a gambling problem and to learn new anti-money-laundering measures.
The Grand National, an improvement in football betting revenue, and increased winnings through slot machines provided a much-needed boost, while online revenues were also up 35pc. Total revenues rose 13pc to hit £606m.
Continued investment into the mobile app could generate strong future sales as gamblers increasingly opt for smartphones over high street bookies.
Ladbrokes share price slipped 0.89pc in early trading as investors reacted to the unexpected losses at Gala Coral. The Competition and Markets Authority (CMA) is currently reviewing the £2.3bn merger, which was first mooted in July last year.
It has been a challenging few months for the two companies. The betting giants could be required to offload 350 to 400 shops from their combined network of 4,000 high-street locations before the deal can be completed.
Last month, Ladbrokes became the latest company to fall foul of shareholders over executive pay, with 42pc voting against the bookmaker's remuneration report at its annual general meeting.
A spokesman for Gala Coral said that the company was "in good shape".
"We're on track with the CMA and the numbers for disposals were at the low end of analysts' expectations," he said. "We're in good shape and well positioned for the future and for this merger to go through as anticipated."
Along with William Hill and Betfred, the four largest national bookmakers control around 87pc of the market. Analysts expect the merger to complete in the fourth quarter of this year.
This compares to a profit of £103.4m during the same period last year. Last year's earnings were artificially inflated by an extra £158.5m generated from asset disposals.
The company was at pains to refer to the more rosy earnings before profit, tax and other considerations figure in its filings, which shows a rise in income of 16pc.
It also offered investors another figure that strips out the effects of regulation, suggesting a revised Ebitda rise of 43pc.
The company is currently awaiting regulatory approval for its merger with rival Ladbrokes.
Gala Coral blamed Cheltenham festival, which was "the worst for the industry since 2003", for the poor results.
Operating expenses jumped by 67pc to £318.8m, a rise the company attributed to salary increases and the cost of training staff to spot customers with a gambling problem and to learn new anti-money-laundering measures.
The Grand National, an improvement in football betting revenue, and increased winnings through slot machines provided a much-needed boost, while online revenues were also up 35pc. Total revenues rose 13pc to hit £606m.
Continued investment into the mobile app could generate strong future sales as gamblers increasingly opt for smartphones over high street bookies.
Ladbrokes share price slipped 0.89pc in early trading as investors reacted to the unexpected losses at Gala Coral. The Competition and Markets Authority (CMA) is currently reviewing the £2.3bn merger, which was first mooted in July last year.
It has been a challenging few months for the two companies. The betting giants could be required to offload 350 to 400 shops from their combined network of 4,000 high-street locations before the deal can be completed.
Last month, Ladbrokes became the latest company to fall foul of shareholders over executive pay, with 42pc voting against the bookmaker's remuneration report at its annual general meeting.
A spokesman for Gala Coral said that the company was "in good shape".
"We're on track with the CMA and the numbers for disposals were at the low end of analysts' expectations," he said. "We're in good shape and well positioned for the future and for this merger to go through as anticipated."
Along with William Hill and Betfred, the four largest national bookmakers control around 87pc of the market. Analysts expect the merger to complete in the fourth quarter of this year.
April 28, 2016
Gala Coral rings changes after AML failures
Gala Coral said it has instigated changes across its anti-money laundering (AML) and social responsibility (SR) policies after failures identified by the UK Gambling Commission (UKGC) cost it almost £850,000 (€1.1m/$1.2m).
The UK gaming operator, which runs Coral, Grosvenor Casinos and the Gala Bingo website, has acted after it failed to deal adequately with a customer who fraudulently spent more than £800,000 with the company between 2012 and January 2015 and is now serving a three-year prison sentence.
After an investigation, the UKGC concluded that the identified issues highlighted by this customer indicated wider systemic faults with Gala Coral Group’s approach to AML and SR at the relevant time.
The UKGC found that Gala Coral failed to appropriately assess customer risk and obtain adequate information with regard to customers’ source of funds or source of wealth. It also did not utilise open source internet resources effectively or effectively use account information to identify potential problem gamblers.
The gaming operator has returned the customer’s gross gambling yield of £846,000 to the vulnerable adult that he stole from and has made a number of improvements to its procedures over the course of the last year.
“These improvements included new tools to enhance customer checks, increased headcount in our anti-money laundering team and improved training for retail and online customer-facing colleagues,” a Gala Coral spokesperson said. “We also intend to submit our AML and SR policies to a review by a third party.
“Gala Coral remains fully committed to working with the Commission and the broader industry to strengthen existing controls and to ensure that responsible gambling remains at the core of our business.”
The UKGC has warned operators to remember that under the Gambling Act 2005 their licence depends on taking appropriate steps to “keep crime out of gambling”.
Richard Watson, programme director at the UKGC, added: “We expect the industry will learn the lessons from this case, as it is their responsibility to keep crime out of gambling and protect vulnerable people from harm.
“We know that Gala Coral have reflected heavily on this case and have assured us of actions they have taken to address the failings. Operators must proactively monitor customers to keep gambling safe and free from crime.”
The UK gaming operator, which runs Coral, Grosvenor Casinos and the Gala Bingo website, has acted after it failed to deal adequately with a customer who fraudulently spent more than £800,000 with the company between 2012 and January 2015 and is now serving a three-year prison sentence.
After an investigation, the UKGC concluded that the identified issues highlighted by this customer indicated wider systemic faults with Gala Coral Group’s approach to AML and SR at the relevant time.
The UKGC found that Gala Coral failed to appropriately assess customer risk and obtain adequate information with regard to customers’ source of funds or source of wealth. It also did not utilise open source internet resources effectively or effectively use account information to identify potential problem gamblers.
The gaming operator has returned the customer’s gross gambling yield of £846,000 to the vulnerable adult that he stole from and has made a number of improvements to its procedures over the course of the last year.
“These improvements included new tools to enhance customer checks, increased headcount in our anti-money laundering team and improved training for retail and online customer-facing colleagues,” a Gala Coral spokesperson said. “We also intend to submit our AML and SR policies to a review by a third party.
“Gala Coral remains fully committed to working with the Commission and the broader industry to strengthen existing controls and to ensure that responsible gambling remains at the core of our business.”
The UKGC has warned operators to remember that under the Gambling Act 2005 their licence depends on taking appropriate steps to “keep crime out of gambling”.
Richard Watson, programme director at the UKGC, added: “We expect the industry will learn the lessons from this case, as it is their responsibility to keep crime out of gambling and protect vulnerable people from harm.
“We know that Gala Coral have reflected heavily on this case and have assured us of actions they have taken to address the failings. Operators must proactively monitor customers to keep gambling safe and free from crime.”
April 17, 2016
UK watchdog may require Ladbrokes Coral sell 1K betting shops
The proposed merger of UK gambling giants Ladbrokes and Gala Coral Group may have hit a snag over how many retail betting shops the companies will be forced to sell.
The UK’s Competition Markets Authority (CMA) was expected to issue a provisional decision by April 18 on whether to permit the £2.3b Lads-Coral merger to proceed. On Thursday, City AM quoted sources saying that this timeline was now ‘highly unlikely.”
While the CMA’s final ruling on the merger is still expected to be released on June 24, City AM’s source claimed a potential hiccup had arisen over how many of the two operators’ combined 4k betting shops would need to be sold off to address competition concerns.
Scuttlebutt had it that the two operators would be required to reduce their retail presence by between 300 and 500 shops, but City AM claimed the CMA may require as many as 1k shops to be sold to smaller betting operators to ensure a healthy and competitive market for retail punters.
The CMA is expected to identify which shops give it the most competition concerns and the CMA is also believed to be insisting that the shops in question be sold rather than merely closed, public knowledge of which could put Lads-Coral in an unwanted ‘motivated seller’ position when it comes to negotiating prices for these shops.
The merger has been opposed by rival William Hill, whose high street dominance would be eclipsed should the Lads-Coral union receive the regulatory thumbs-up. The CMA’s reported insistence on a larger sell-off of shops may be a response to Hills’ objections, which claimed the market “may not be capable of establishing the third national force which would be lost as a result of this merger.”
The UK’s Competition Markets Authority (CMA) was expected to issue a provisional decision by April 18 on whether to permit the £2.3b Lads-Coral merger to proceed. On Thursday, City AM quoted sources saying that this timeline was now ‘highly unlikely.”
While the CMA’s final ruling on the merger is still expected to be released on June 24, City AM’s source claimed a potential hiccup had arisen over how many of the two operators’ combined 4k betting shops would need to be sold off to address competition concerns.
Scuttlebutt had it that the two operators would be required to reduce their retail presence by between 300 and 500 shops, but City AM claimed the CMA may require as many as 1k shops to be sold to smaller betting operators to ensure a healthy and competitive market for retail punters.
The CMA is expected to identify which shops give it the most competition concerns and the CMA is also believed to be insisting that the shops in question be sold rather than merely closed, public knowledge of which could put Lads-Coral in an unwanted ‘motivated seller’ position when it comes to negotiating prices for these shops.
The merger has been opposed by rival William Hill, whose high street dominance would be eclipsed should the Lads-Coral union receive the regulatory thumbs-up. The CMA’s reported insistence on a larger sell-off of shops may be a response to Hills’ objections, which claimed the market “may not be capable of establishing the third national force which would be lost as a result of this merger.”
February 17, 2016
Coral head of trading resigns
Head of Trading Sam Foulkes has quit Coral. He left earlier this month having tendered his resignation in December, and is now seeing out a period of gardening leave.
Sam FoulkesNews of Foulkes’ departure comes just five months after he had been promoted to the head of trading role, which saw him relocate from Coral’s Stratford headquarters to the operator’s Gibraltar offices.
The move was part of a wider restructuring of the sportsbook trading division, which also saw Danny Greer become head of in-play and the trading division split to form separate in-play and pre-match pricing teams.
Foulkes joined Coral in 2012 after having previously spent eight years at rival William Hill, where he had held various roles including senior trader and head of in-play football. Speaking to eGaming Review, he said it was the right time to move on:
“I am immensely proud of my achievements at Coral and after four years, I felt it was the right time for a new challenge. I’ve had a number of exciting work offers already and I’m expecting to take up a new role within the next few months.”
A spokesperson for the operator confirmed: “Sam recently left Coral and we wish him the very best for the future. No decision been made on how to replace him but we have a strong team so we are not in any hurry to decide.”
Sam FoulkesNews of Foulkes’ departure comes just five months after he had been promoted to the head of trading role, which saw him relocate from Coral’s Stratford headquarters to the operator’s Gibraltar offices.
The move was part of a wider restructuring of the sportsbook trading division, which also saw Danny Greer become head of in-play and the trading division split to form separate in-play and pre-match pricing teams.
Foulkes joined Coral in 2012 after having previously spent eight years at rival William Hill, where he had held various roles including senior trader and head of in-play football. Speaking to eGaming Review, he said it was the right time to move on:
“I am immensely proud of my achievements at Coral and after four years, I felt it was the right time for a new challenge. I’ve had a number of exciting work offers already and I’m expecting to take up a new role within the next few months.”
A spokesperson for the operator confirmed: “Sam recently left Coral and we wish him the very best for the future. No decision been made on how to replace him but we have a strong team so we are not in any hurry to decide.”
December 28, 2015
Ladbrokes boss makes the biggest gamble of his career
I was brought up with my grandparents,” says Ladbrokes chief executive Jim Mullen, and they “would show me how to put on bets”.
“What I didn’t know at the time was my grandfather and my grandmother were teaching me my arithmetic and fractions.
“They were putting a bet on and then I would have to work out what the winnings were, and that was the game we played on a Saturday and a Sunday.
“I look back on it fondly as I try to do the same with my own sons now.”
Mullen has been enthusiastic about gambling ever since those early maths lessons. And Ladbrokes’ £2.3bn merger with rival bookie Coral arguably marks his biggest wager yet.
Beleaguered Ladbrokes has lost ground to competitors in recent years and Mullen hopes to reverse that decline by combining the company with Coral to create Britain’s biggest bookie, a giant with about 4,000 betting shops.
Informal talks between the two companies started before Mullen took over at Ladbrokes in April. However, Mullen has been central to the deal since taking charge of the troubled bookie, and is emphatic the merger will help revive its fortunes.
But the tie-up faces challenges that Mullen, who will lead the merged company, must overcome.
The biggest is securing the approval of the Competition and Markets Authority (CMA) without being forced to sell so many shops the deal becomes unworkable.
Some analysts have estimated the regulator could demand that Ladbrokes Coral, as the combined business would be called, offloads more than 1,000 shops. Mullen dismisses this as “just a farcical figure” and adds: “I would hope that the CMA… knows that we’re doing this obviously to grow scale in a sector which I believe is con-solidating.”
Mullen must also contend with opposition to the deal from a vocal Ladbrokes shareholder, the Irish billionaire Dermot Desmond. The tycoon urged investors to block the tie-up, arguing the merger encumbers Ladbrokes’ shareholders with privately-owned Coral’s debt.
Although shareholders overwhelmingly approved the deal last month, Desmond, who has encouraged Ladbrokes to hire new M&A advisers to examine alternatives to the Coral deal, has pledged to fight on. Despite that threat, Mullen refuses to criticise the outspoken investor.
“I am happy to discuss and debate the concerns that he has, but I’m just not quite clear what the alternative is,” he says.
Does he like Desmond? “Yes,” comes the quick reply, “because he invests in Ladbrokes and I like my shareholders. I also like that he’s invested in Celtic and it’s my hometown club.”
Born in Glasgow, Mullen, 45, is an avid fan of Celtic and enjoys betting on Scottish football “because I think I know something about it”.
Practising his sums with his grandparents, Mullen, now a married father of two boys, grew familiar with gambling from a young age.
“All my family went to betting shops,” he says. “I was brought up where it was a pastime.”
After leaving John Ogilvie High School in Hamilton in South Lanarkshire, Mullen studied computing at Glasgow Caledonian University, when he made a killing staking a considerable portion of his student grant on Celtic winning the double. Gambling aside, Mullen, who also has an MSc in software engineering, funded his student days working in a William Hill betting shop, and after graduating took a job at Celtic’s rival club, Rangers, developing its ticketing.
Jobs at advertising agencies both in Scotland and London were followed by a spell at News International where, among other things, Mullen developed digital strategy for Sun Bingo. He then joined William Hill’s online business as chief operating officer in 2010 before moving to Ladbrokes in 2013 to lead its digital operations.
Mullen is refreshingly honest about the mistakes that have damaged Ladbrokes.
“We missed out in football,” he concedes, admitting that rivals “stole a march” in developing bet-in-play products for the game.
Under his predecessor, Richard Glynn, Ladbrokes focused on building its own in-house digital technology rather joining rivals in enlisting the expert help of third parties such as Playtech. It was “a brave decision”, Mullen says, but “it didn’t work out and put us back three years”. Ladbrokes eventually struck a partnership with Playtech in 2013.
Still, Mullen will not blame Glynn for Ladbrokes’s misfortunes.
“I got on well with Richard; he made some informed decisions and some of the bets didn’t pay off. But I’ve been the CEO for eight months now, so you need to starting looking at Jim Mullen,” he says.
Certainly, the new boss has been quick to develop a turnaround plan, which he unveiled in July alongside a dividend cut.
While waiting for the CMA to investigate the Coral merger, Mullen wants to transform Ladbrokes into a “multi-channel” business.
Quarterly results in October showed Mullen’s plan is starting to bear fruit, with the bookie having acquired more than 20,000 new active online punters through its shops.
However, despite that progress, the Ladbrokes boss is adamant the entire industry now requires respite from new regulation if bookies are to successfully plan for the future.
Since last December, gambling firms have been hit by a 15pc tax on online betting, an increase in the duty on gaming machines to 20pc, and restrictions on staking on fixed odds betting terminals.
“I just ask for clear air from the government and regulators,” says Mullen, who believes the divisive industry “needs defending by leaders who actually love the sector”.
He is scathing of critics who he believes do not understand gambling, which has staunch opponents.
“I just don’t like people who have never put a bet on who make judgement calls on this sector provides,” Mullen says.
He speaks with equal passion about horse racing, where an escalating row over racing funding could see some bookies barred by the sport from sponsoring events.
“I will be showing up at all of the opportunities to sponsor racing until racing tells me I’m not welcome,” Mullen says.
He warns that if Ladbrokes is forced to divert its sponsorship money into other sports “it will take three years for it to come back [to racing]. That would be a very, very dangerous place for us to get to.”
Ladbrokes is “fanatical” about racing, making it a natural sponsorship partner for the sport, says Mullen.
Indeed, the first bet he can remember placing with his grandparents was on Red Rum’s third Grand National win.
Mullen says his two sons are not bad at picking race winners, either.
“By going on the colour of silks, their performance has been far better than mine from following the form, which is the great thing about sport.”
“What I didn’t know at the time was my grandfather and my grandmother were teaching me my arithmetic and fractions.
“They were putting a bet on and then I would have to work out what the winnings were, and that was the game we played on a Saturday and a Sunday.
“I look back on it fondly as I try to do the same with my own sons now.”
Mullen has been enthusiastic about gambling ever since those early maths lessons. And Ladbrokes’ £2.3bn merger with rival bookie Coral arguably marks his biggest wager yet.
Beleaguered Ladbrokes has lost ground to competitors in recent years and Mullen hopes to reverse that decline by combining the company with Coral to create Britain’s biggest bookie, a giant with about 4,000 betting shops.
Informal talks between the two companies started before Mullen took over at Ladbrokes in April. However, Mullen has been central to the deal since taking charge of the troubled bookie, and is emphatic the merger will help revive its fortunes.
But the tie-up faces challenges that Mullen, who will lead the merged company, must overcome.
The biggest is securing the approval of the Competition and Markets Authority (CMA) without being forced to sell so many shops the deal becomes unworkable.
Some analysts have estimated the regulator could demand that Ladbrokes Coral, as the combined business would be called, offloads more than 1,000 shops. Mullen dismisses this as “just a farcical figure” and adds: “I would hope that the CMA… knows that we’re doing this obviously to grow scale in a sector which I believe is con-solidating.”
Mullen must also contend with opposition to the deal from a vocal Ladbrokes shareholder, the Irish billionaire Dermot Desmond. The tycoon urged investors to block the tie-up, arguing the merger encumbers Ladbrokes’ shareholders with privately-owned Coral’s debt.
Although shareholders overwhelmingly approved the deal last month, Desmond, who has encouraged Ladbrokes to hire new M&A advisers to examine alternatives to the Coral deal, has pledged to fight on. Despite that threat, Mullen refuses to criticise the outspoken investor.
“I am happy to discuss and debate the concerns that he has, but I’m just not quite clear what the alternative is,” he says.
Does he like Desmond? “Yes,” comes the quick reply, “because he invests in Ladbrokes and I like my shareholders. I also like that he’s invested in Celtic and it’s my hometown club.”
Born in Glasgow, Mullen, 45, is an avid fan of Celtic and enjoys betting on Scottish football “because I think I know something about it”.
Practising his sums with his grandparents, Mullen, now a married father of two boys, grew familiar with gambling from a young age.
“All my family went to betting shops,” he says. “I was brought up where it was a pastime.”
After leaving John Ogilvie High School in Hamilton in South Lanarkshire, Mullen studied computing at Glasgow Caledonian University, when he made a killing staking a considerable portion of his student grant on Celtic winning the double. Gambling aside, Mullen, who also has an MSc in software engineering, funded his student days working in a William Hill betting shop, and after graduating took a job at Celtic’s rival club, Rangers, developing its ticketing.
Jobs at advertising agencies both in Scotland and London were followed by a spell at News International where, among other things, Mullen developed digital strategy for Sun Bingo. He then joined William Hill’s online business as chief operating officer in 2010 before moving to Ladbrokes in 2013 to lead its digital operations.
Mullen is refreshingly honest about the mistakes that have damaged Ladbrokes.
“We missed out in football,” he concedes, admitting that rivals “stole a march” in developing bet-in-play products for the game.
Under his predecessor, Richard Glynn, Ladbrokes focused on building its own in-house digital technology rather joining rivals in enlisting the expert help of third parties such as Playtech. It was “a brave decision”, Mullen says, but “it didn’t work out and put us back three years”. Ladbrokes eventually struck a partnership with Playtech in 2013.
Still, Mullen will not blame Glynn for Ladbrokes’s misfortunes.
“I got on well with Richard; he made some informed decisions and some of the bets didn’t pay off. But I’ve been the CEO for eight months now, so you need to starting looking at Jim Mullen,” he says.
Certainly, the new boss has been quick to develop a turnaround plan, which he unveiled in July alongside a dividend cut.
While waiting for the CMA to investigate the Coral merger, Mullen wants to transform Ladbrokes into a “multi-channel” business.
Quarterly results in October showed Mullen’s plan is starting to bear fruit, with the bookie having acquired more than 20,000 new active online punters through its shops.
However, despite that progress, the Ladbrokes boss is adamant the entire industry now requires respite from new regulation if bookies are to successfully plan for the future.
Since last December, gambling firms have been hit by a 15pc tax on online betting, an increase in the duty on gaming machines to 20pc, and restrictions on staking on fixed odds betting terminals.
“I just ask for clear air from the government and regulators,” says Mullen, who believes the divisive industry “needs defending by leaders who actually love the sector”.
He is scathing of critics who he believes do not understand gambling, which has staunch opponents.
“I just don’t like people who have never put a bet on who make judgement calls on this sector provides,” Mullen says.
He speaks with equal passion about horse racing, where an escalating row over racing funding could see some bookies barred by the sport from sponsoring events.
“I will be showing up at all of the opportunities to sponsor racing until racing tells me I’m not welcome,” Mullen says.
He warns that if Ladbrokes is forced to divert its sponsorship money into other sports “it will take three years for it to come back [to racing]. That would be a very, very dangerous place for us to get to.”
Ladbrokes is “fanatical” about racing, making it a natural sponsorship partner for the sport, says Mullen.
Indeed, the first bet he can remember placing with his grandparents was on Red Rum’s third Grand National win.
Mullen says his two sons are not bad at picking race winners, either.
“By going on the colour of silks, their performance has been far better than mine from following the form, which is the great thing about sport.”
December 10, 2015
Betfred looking at 500 betting shop sale off
With the Ladbrokes and Coral deal moving forward with the £2.3 billion merger, Betfred are looking to possibly snap up some 500 betting shops from the newly combined betting firm that Betfred believe will have to be sold to allow the deal through the Competitions Commission.
Currently Ladbrokes and Coral have a combined estate of 4,000 sites and to get the deal through the competition commission the business believes it will have to shed some 500 betting shops and that’s where Betfred hope to profit.
Fred Done, who founded the business with his brother Peter 48 years ago, told The Sunday Telegraph he would “absolutely” be willing to talk to the bookmakers about buying sites offloaded to gain regulatory approval for the deal.
“We operate just short of 1,400 shops, another 400 or 500 shops wouldn’t be a problem to run,” he said. “If somebody knocks at my door and says: ‘Fred, do you want to buy some of these shops?’, I’d like to sit down with Coral and Ladbrokes and have a discussion with them.”
Most analyst’s say that with the merged company having some 45% share of the market by the number of betting shops and 47% share of total revenues in betting shops in the UK many say that a sale of some 500 shops will have to happen to reduce that share percentage.
However Betfred think there will be competition for those shops from Paddy Power, private equity firms and foreign buyers.
Currently Ladbrokes and Coral have a combined estate of 4,000 sites and to get the deal through the competition commission the business believes it will have to shed some 500 betting shops and that’s where Betfred hope to profit.
Fred Done, who founded the business with his brother Peter 48 years ago, told The Sunday Telegraph he would “absolutely” be willing to talk to the bookmakers about buying sites offloaded to gain regulatory approval for the deal.
“We operate just short of 1,400 shops, another 400 or 500 shops wouldn’t be a problem to run,” he said. “If somebody knocks at my door and says: ‘Fred, do you want to buy some of these shops?’, I’d like to sit down with Coral and Ladbrokes and have a discussion with them.”
Most analyst’s say that with the merged company having some 45% share of the market by the number of betting shops and 47% share of total revenues in betting shops in the UK many say that a sale of some 500 shops will have to happen to reduce that share percentage.
However Betfred think there will be competition for those shops from Paddy Power, private equity firms and foreign buyers.
November 18, 2015
Billionaire investor opposes £2bn Ladbrokes merger with Coral
Dermot Desmond, the Irish billionaire and an investor in Ladbrokes, has urged shareholders in the troubled bookmaker to oppose its £2bn merger with rival Coral less than a week before they are due to vote on the deal.
Mr Desmond, who is thought to own at least 1pc of the bookie, has written an open letter to other shareholders in which he described the deal as “the death of Ladbrokes as an independent company”. He said that investors should vote against the merger at Tuesday’s general meeting and should call on Ladbrokes to hire an independent investment bank to help it “review all strategic options” open to it in “a very active M&A market”.
The tie-up, which the two companies agreed in July, will create Britain’s biggest bookie by betting shops with the combined business potentially owning about 4,000 sites. As well as giving Ladbrokes, which has fallen behind its competitors in recent years, much-needed scale, it also gives the bookie access to privately-owned Coral’s well-regarded online business.
However, because the combined company would own so many shops the deal faces intense scrutiny from the competition regulator, which is likely to demand disposals. Investors have been unimpressed by the deal, with Ladbrokes’s shares initially jumping in June when it emerged the two bookies were in talks, but then slumping by 22pc. The stock was unchanged at 109.3p today.
“The real winners in this transaction are the Coral shareholders,” said Mr Desmond, who sold the Betdaq exchange to Ladbrokes for €30m in 2013. “Make no mistake – this is a zero premium acquisition of Ladbrokes by Coral.”
He said that the company could be forced by the Competition and Markets Authority to sell as many as 1,000 sites and that “the lost profits from any such disposed shops may outweigh the unspecified synergies which the proposed transaction is hoped to yield”.
A Ladbrokes shareholder said the bookie had been aware of Mr Desmond’s views but was confident the merger would receive enough shareholder support.
"We have had significant dealings with Mr Desmond as both a shareholder and a commercial partner over recent times,” he said.
“We note his views and are not surprised by them as he has been in extensive dialogue with the management team and not been afraid to talk of undertaking such action. As a shareholder he has a right to express his view and to vote accordingly at the EGM next week.
“We remain confident that shareholders see the attraction of the proposed deal and continue to work towards a successful conclusion to the deal."
The British gambling industry has been gripped by a wave of deal-making, with Paddy Power merging with Betfair and online gambling group GVC buying rival Bwin.Party. William Hill has been left on the sidelines.
Nick Batram, an analyst at Peel Hunt, said Mr Desmond’s intervention could encourage a bidder for Ladbrokes.
“It is contradictory in places and doesn’t really put forward much of an alternative plan, other than putting the group up for sale,” the analyst said of the letter. “However, it could just act as a catalyst to encourage others to join the fray, and a competitive situation should be good news for shareholders.”
Mr Desmond, who is thought to own at least 1pc of the bookie, has written an open letter to other shareholders in which he described the deal as “the death of Ladbrokes as an independent company”. He said that investors should vote against the merger at Tuesday’s general meeting and should call on Ladbrokes to hire an independent investment bank to help it “review all strategic options” open to it in “a very active M&A market”.
The tie-up, which the two companies agreed in July, will create Britain’s biggest bookie by betting shops with the combined business potentially owning about 4,000 sites. As well as giving Ladbrokes, which has fallen behind its competitors in recent years, much-needed scale, it also gives the bookie access to privately-owned Coral’s well-regarded online business.
However, because the combined company would own so many shops the deal faces intense scrutiny from the competition regulator, which is likely to demand disposals. Investors have been unimpressed by the deal, with Ladbrokes’s shares initially jumping in June when it emerged the two bookies were in talks, but then slumping by 22pc. The stock was unchanged at 109.3p today.
“The real winners in this transaction are the Coral shareholders,” said Mr Desmond, who sold the Betdaq exchange to Ladbrokes for €30m in 2013. “Make no mistake – this is a zero premium acquisition of Ladbrokes by Coral.”
He said that the company could be forced by the Competition and Markets Authority to sell as many as 1,000 sites and that “the lost profits from any such disposed shops may outweigh the unspecified synergies which the proposed transaction is hoped to yield”.
A Ladbrokes shareholder said the bookie had been aware of Mr Desmond’s views but was confident the merger would receive enough shareholder support.
"We have had significant dealings with Mr Desmond as both a shareholder and a commercial partner over recent times,” he said.
“We note his views and are not surprised by them as he has been in extensive dialogue with the management team and not been afraid to talk of undertaking such action. As a shareholder he has a right to express his view and to vote accordingly at the EGM next week.
“We remain confident that shareholders see the attraction of the proposed deal and continue to work towards a successful conclusion to the deal."
The British gambling industry has been gripped by a wave of deal-making, with Paddy Power merging with Betfair and online gambling group GVC buying rival Bwin.Party. William Hill has been left on the sidelines.
Nick Batram, an analyst at Peel Hunt, said Mr Desmond’s intervention could encourage a bidder for Ladbrokes.
“It is contradictory in places and doesn’t really put forward much of an alternative plan, other than putting the group up for sale,” the analyst said of the letter. “However, it could just act as a catalyst to encourage others to join the fray, and a competitive situation should be good news for shareholders.”
October 28, 2015
Bet365, Coral and Totesport tweets banned over Jordan Spieth images
Bet365, Coral and Totesport have hit a triple bogey after the UK advertising watchdog censured the bookmakers for using images of US Open champion Jordan Spieth to promote betting.
Under the UK advertising code it is illegal to use people aged under 25, or someone who appears to be so, to play a “significant role” in promoting gambling and betting.
Images of Spieth, who is 22, featured in Twitter campaigns for the bookmakers.
Coral said the photo of Spieth was used to illustrate the odds available rather than promote specific bonus offers, but it had made changes to ensure that similar tweets complied with the code.
Bet365 said its tweet reported on a major sporting event and therefore did not breach the code, while Totesport said Spieth was neither a young person nor vulnerable and the ad did not show him gambling or indulging in juvenile or loutish behaviour.
The Advertising Standards Authority said the tweets were designed to promote each bookmaker’s brand and referred to future sporting events on which the public might consider betting.
“We considered the tweet[s] [were] directly connected with the supply or transfer of goods,” said the ASA. “We therefore concluded that the ad was irresponsible and breached the [advertising] code. The ad must not be shown again in its current form.”
Under the UK advertising code it is illegal to use people aged under 25, or someone who appears to be so, to play a “significant role” in promoting gambling and betting.
Images of Spieth, who is 22, featured in Twitter campaigns for the bookmakers.
Coral said the photo of Spieth was used to illustrate the odds available rather than promote specific bonus offers, but it had made changes to ensure that similar tweets complied with the code.
Bet365 said its tweet reported on a major sporting event and therefore did not breach the code, while Totesport said Spieth was neither a young person nor vulnerable and the ad did not show him gambling or indulging in juvenile or loutish behaviour.
The Advertising Standards Authority said the tweets were designed to promote each bookmaker’s brand and referred to future sporting events on which the public might consider betting.
“We considered the tweet[s] [were] directly connected with the supply or transfer of goods,” said the ASA. “We therefore concluded that the ad was irresponsible and breached the [advertising] code. The ad must not be shown again in its current form.”
September 16, 2015
William Hill is left chasing the field as tie-ups reshape sector
William Hill began the year as Britain's biggest bookmaker but a series of mergers is pushing it down the pecking order and putting it under pressure to react.
Driven by tighter regulation and tax pressures that are taking chunks out of profits, big betting names Ladbrokes and Gala Coral are combining, as are Betfair and Ireland's Paddy Power.
Online gambling firm GVC also agreed a £1.1bn (€1.5bn) deal for larger rival Bwin.Party this month - with the same factors fuelling consolidation.
The larger companies can divert savings into higher marketing spend and potentially offer a wider array of improved products to gamblers on smart phones and tablets. Smaller rivals are then squeezed out and these new groups' lower costs, enhanced market share and larger revenues all help to soften bigger tax charges.
High street shops where gamblers can bet on horse or greyhound racing have been a feature of British and Irish towns since the 1960s. Betting "in play" on televised football matches has also attracted a younger generation of tech-savy sports fans as the gambling scene has moved online.
William Hill grasped these trends before rivals but now appears to have ground to make up.
"William Hill could benefit from a potential partnering up with another operator, now it has more credible competition coming. But it's hard to see exactly who," HSBC analysts said.
Led by CEO James Henderson, a 30-year company insider who replaced veteran Ralph Topping last year, it was William Hill who made one of the first moves of 2015, tabling a £720m bid for online gambling firm 888.
That deal collapsed but the M&A wave since has narrowed the field, including the removal of Betfair, which analysts had tipped as a fit.
For William Hill, 888 remains the obvious choice. The firm has a market capitalisation five times smaller than William Hill's and would add leading technology, strong casino and bingo positions and a lot of cost synergies to its arsenal, analysts say.
The only other big player is Bet365, it is likely too expensive and has an exposure to unregulated markets William Hill wants to avoid.
Driven by tighter regulation and tax pressures that are taking chunks out of profits, big betting names Ladbrokes and Gala Coral are combining, as are Betfair and Ireland's Paddy Power.
Online gambling firm GVC also agreed a £1.1bn (€1.5bn) deal for larger rival Bwin.Party this month - with the same factors fuelling consolidation.
The larger companies can divert savings into higher marketing spend and potentially offer a wider array of improved products to gamblers on smart phones and tablets. Smaller rivals are then squeezed out and these new groups' lower costs, enhanced market share and larger revenues all help to soften bigger tax charges.
High street shops where gamblers can bet on horse or greyhound racing have been a feature of British and Irish towns since the 1960s. Betting "in play" on televised football matches has also attracted a younger generation of tech-savy sports fans as the gambling scene has moved online.
William Hill grasped these trends before rivals but now appears to have ground to make up.
"William Hill could benefit from a potential partnering up with another operator, now it has more credible competition coming. But it's hard to see exactly who," HSBC analysts said.
Led by CEO James Henderson, a 30-year company insider who replaced veteran Ralph Topping last year, it was William Hill who made one of the first moves of 2015, tabling a £720m bid for online gambling firm 888.
That deal collapsed but the M&A wave since has narrowed the field, including the removal of Betfair, which analysts had tipped as a fit.
For William Hill, 888 remains the obvious choice. The firm has a market capitalisation five times smaller than William Hill's and would add leading technology, strong casino and bingo positions and a lot of cost synergies to its arsenal, analysts say.
The only other big player is Bet365, it is likely too expensive and has an exposure to unregulated markets William Hill wants to avoid.
July 24, 2015
Ladbrokes merges with Coral to create £2.3bn bookmaking giant
Ladbrokes, the beleaguered gambling company, has agreed a £2.3bn merger with Gala Coral to create Britain's biggest bookmaker.
The deal creates a company with £2.1bn of revenues and the country's largest estate of betting shops. The combined business, which will be listed on the stock exchange and called Ladbrokes Coral, will have a market capitalisation of £2.3bn. Both brands will be retained.
Ladbrokes has lagged rival William Hill in recent years, particularly in online sports-betting. It hopes that by merging with Gala's digital division, UK betting shop business, and Italian operation it can leapfrog its competitors. Gala's bingo business is not part of the tie-up.
Shareholders in Ladbrokes, which is already listed in the FTSE 250, will have 51.75pc of the new business, while investors in Gala, which is owned by a group of private equity houses including Anchorage Capital Partners and Apollo Global Management, will have 48.25pc. Ladbrokes is also launching a share placing of 9.99pc of its share capital on Friday.
Jim Mullen, who is currently boss of Ladbrokes, will lead the combined company, as was expected. Gala chief executive Carl Leaver will become executive deputy chairman.
Coral executive Andy Hornby, the controversial former banker who presided over the collapse of HBOS at the height of the financial crisis, will take the role of chief operating officer of the UK betting shop and digital businesses, but he will not be on the public company's board.
"This is a major strategic step for Ladbrokes which firmly accelerates our strategy to improve the customers' experience and build recreational scale," said Ladbrokes chairman Peter Erskine. "Ladbrokes and Coral are two highly complementary businesses, with rich heritage and brand presence across the UK and internationally."
Given the deal will create a dominant player in the betting shops, the Competition and Markets Authority (CMA) will likely be a major obstacle to the deal. Without making any disposals, the new company would have more than 4,000 shops.
"Both Ladbrokes and Gala Coral are confident that the merger is deliverable and are committed to working closely with the CMA in its review," the companies said on Friday.
However, they added that "it is anticipated that the combined entity will need to dispose of retail stores to satisfy potential CMA requirements", although even after those sales it will still have the country's biggest shop estate, the companies said.
Cost synergies are expected to reach £65m per annum three years after the deal completes. Ladbrokes also revealed that it was slashing its dividend to 3p as it attempts to shore up its finances.
The deal creates a company with £2.1bn of revenues and the country's largest estate of betting shops. The combined business, which will be listed on the stock exchange and called Ladbrokes Coral, will have a market capitalisation of £2.3bn. Both brands will be retained.
Ladbrokes has lagged rival William Hill in recent years, particularly in online sports-betting. It hopes that by merging with Gala's digital division, UK betting shop business, and Italian operation it can leapfrog its competitors. Gala's bingo business is not part of the tie-up.
Shareholders in Ladbrokes, which is already listed in the FTSE 250, will have 51.75pc of the new business, while investors in Gala, which is owned by a group of private equity houses including Anchorage Capital Partners and Apollo Global Management, will have 48.25pc. Ladbrokes is also launching a share placing of 9.99pc of its share capital on Friday.
Jim Mullen, who is currently boss of Ladbrokes, will lead the combined company, as was expected. Gala chief executive Carl Leaver will become executive deputy chairman.
Coral executive Andy Hornby, the controversial former banker who presided over the collapse of HBOS at the height of the financial crisis, will take the role of chief operating officer of the UK betting shop and digital businesses, but he will not be on the public company's board.
"This is a major strategic step for Ladbrokes which firmly accelerates our strategy to improve the customers' experience and build recreational scale," said Ladbrokes chairman Peter Erskine. "Ladbrokes and Coral are two highly complementary businesses, with rich heritage and brand presence across the UK and internationally."
Given the deal will create a dominant player in the betting shops, the Competition and Markets Authority (CMA) will likely be a major obstacle to the deal. Without making any disposals, the new company would have more than 4,000 shops.
"Both Ladbrokes and Gala Coral are confident that the merger is deliverable and are committed to working closely with the CMA in its review," the companies said on Friday.
However, they added that "it is anticipated that the combined entity will need to dispose of retail stores to satisfy potential CMA requirements", although even after those sales it will still have the country's biggest shop estate, the companies said.
Cost synergies are expected to reach £65m per annum three years after the deal completes. Ladbrokes also revealed that it was slashing its dividend to 3p as it attempts to shore up its finances.
June 23, 2015
Ladbrokes admits merger talks with Coral
Ladbrokes has revealed it is in shock merger talks with fellow bookmaker Coral as CEO Jim Mullen aims to make immediate progress in catch up with rival William Hill.
Ladbrokes has issued a statement to the stock market, responding to press speculation about a merger, in which it admits to having talks. It said: “In response to recent press speculation, Ladbrokes Plc confirms that it is in discussions with the board of Gala Coral Group Limited regarding a possible merger of Ladbrokes and Coral Retail, Eurobet Retail and Gala Coral’s Online businesses, to create an enlarged business which would be listed on the official list of the UK Listing Authority and traded on the main market of the London Stock Exchange.
“Shareholders are advised that there can be no certainty that the discussions between Ladbrokes and Gala Coral will lead to any agreement concerning the possible merger or as to the timing or terms of any such agreement and there can be no assurance that, even if reached, any such agreement would be completed. Ladbrokes also notes that, in the event that such a transaction proceeds, it may undertake a non pre-emptive equity placing to strengthen the balance sheet of the Combined Entity.”
Ladbrokes is also considering postponing a planned Business Review presentation scheduled for 30 June which it says may now be re-scheduled depending on how discussions progress.
It is certainly one of the most stunning potential mergers in the UK gambling industry, the nearest in scale being the merger between bwin and Party Gaming which hasn’t been an overwhelming success. It certainly represents a bold piece of corporate maneouvering from Jim Mullen. He commented:
“Since becoming CEO my focus has been on a more aggressive plan to build digital scale and grow our recreational customer base across all channels, which is key to creating a more sustainable and growing Ladbrokes. My plans are well advanced and I look forward to presenting them to shareholders.
“A merger with Gala Coral could create a combined business with significant scale and has the potential to generate substantial cost synergies, creating value for both companies’ shareholders.
“The Board has not yet concluded whether a transaction is strategically attractive and can be delivered to shareholders on appropriate terms.”
Coral’s bookmaking business has long been mooted for a stock market listing once the company had divested its bingo business, but few would have anticipated this route. A major hurdle for the deal would be the Competition and Markets Authority, whose predecessor the Office of Fair Trading frequently forced bookmakers to sell off any competing ‘local’ betting shops. The deal will likely see a huge number of beting shops from the combined group go up on the market to satisfy competition concerns, providing opportunities for a firm like Paddy Power to expand significantly and instantly.
Ladbrokes has issued a statement to the stock market, responding to press speculation about a merger, in which it admits to having talks. It said: “In response to recent press speculation, Ladbrokes Plc confirms that it is in discussions with the board of Gala Coral Group Limited regarding a possible merger of Ladbrokes and Coral Retail, Eurobet Retail and Gala Coral’s Online businesses, to create an enlarged business which would be listed on the official list of the UK Listing Authority and traded on the main market of the London Stock Exchange.
“Shareholders are advised that there can be no certainty that the discussions between Ladbrokes and Gala Coral will lead to any agreement concerning the possible merger or as to the timing or terms of any such agreement and there can be no assurance that, even if reached, any such agreement would be completed. Ladbrokes also notes that, in the event that such a transaction proceeds, it may undertake a non pre-emptive equity placing to strengthen the balance sheet of the Combined Entity.”
Ladbrokes is also considering postponing a planned Business Review presentation scheduled for 30 June which it says may now be re-scheduled depending on how discussions progress.
It is certainly one of the most stunning potential mergers in the UK gambling industry, the nearest in scale being the merger between bwin and Party Gaming which hasn’t been an overwhelming success. It certainly represents a bold piece of corporate maneouvering from Jim Mullen. He commented:
“Since becoming CEO my focus has been on a more aggressive plan to build digital scale and grow our recreational customer base across all channels, which is key to creating a more sustainable and growing Ladbrokes. My plans are well advanced and I look forward to presenting them to shareholders.
“A merger with Gala Coral could create a combined business with significant scale and has the potential to generate substantial cost synergies, creating value for both companies’ shareholders.
“The Board has not yet concluded whether a transaction is strategically attractive and can be delivered to shareholders on appropriate terms.”
Coral’s bookmaking business has long been mooted for a stock market listing once the company had divested its bingo business, but few would have anticipated this route. A major hurdle for the deal would be the Competition and Markets Authority, whose predecessor the Office of Fair Trading frequently forced bookmakers to sell off any competing ‘local’ betting shops. The deal will likely see a huge number of beting shops from the combined group go up on the market to satisfy competition concerns, providing opportunities for a firm like Paddy Power to expand significantly and instantly.
May 26, 2015
Gala Bingo suitors line up for bidding war
Gala Coral looks like selling its entire bingo division of 132 clubs to a whole host of suitors within the next four to six weeks it has been reported in the Times.
Several interested parties are looking at snapping up the bingo division of Gala as the betting firm looks to further consolidate its business to online where profits have continued to improve and also readying itself for an IPO later this year.
In selling the final piece of the companies land based business Gala Coral will then completely been able to concentrate on their internet business. Current favourite to take the bingo business is current Managing Director of the bingo business Simon Wykes and a management buyout, however German gaming giant the Gauselmann Group are also named as a potential suitor along with venture capital firms Bridgepoint, Risk Capital Partners and OPCapita.
One final possible player is former CEO of Scientific Games Lorne Weil who is believed to be trying to put together a US led acquisition company to enter the race to buy Gala Bingo. The price for the Gala Bingo business is estimated at £250 million and the eventual winner will expect to know their fate in late June or early July.
Several interested parties are looking at snapping up the bingo division of Gala as the betting firm looks to further consolidate its business to online where profits have continued to improve and also readying itself for an IPO later this year.
In selling the final piece of the companies land based business Gala Coral will then completely been able to concentrate on their internet business. Current favourite to take the bingo business is current Managing Director of the bingo business Simon Wykes and a management buyout, however German gaming giant the Gauselmann Group are also named as a potential suitor along with venture capital firms Bridgepoint, Risk Capital Partners and OPCapita.
One final possible player is former CEO of Scientific Games Lorne Weil who is believed to be trying to put together a US led acquisition company to enter the race to buy Gala Bingo. The price for the Gala Bingo business is estimated at £250 million and the eventual winner will expect to know their fate in late June or early July.
January 26, 2015
UK’s betting firms implement self-policing problem gambling
UK’s biggest gambling companies implement self-regulation, protecting customers in danger of developing gambling problems.
Betting companies will put mandatory time limit on fixed-odds betting terminals (FOBTs) into place, which is described by campaigners as the “crack cocaine” of gambling.
At the start of a session on a terminal, players will be prompted to set their own time or money limit. Even if they choose not to do so, the machine will show a short warning after 30 minutes of use or once a play racks up losses of £250. The companies will also will also cover 8,000 betting shop with messages about betting responsibly as part of an industry-wide “gamble aware week.”
Betting companies have launched a new £2m responsible gambling campaign intended to remind punters to curb their impulses when gambling. The new watchdog named the Senet Group, whose ranks include Coral, Ladbrokes, Paddy Power and William Hill, have debuted a pair of new TV adverts centered around the message that: “when the fun stops, stop.”
“75% of customers, when hitting a limit, stop immediately or don’t put any more money into the machine. But not enough customers are setting limits.” said Carl Leaver, chief executive of Gala Coral.
“Campaigners would say that problem gamblers were our best customers, actually the reverse is true – they are our worst customers,” he added. “We want people who continue to have fun for month after month, year after year. Our hope is that in introducing these measures, customers will manage their own spending better.”
According to the Responsible Gaming Trust after it took its first in-depth analysis at FOBT that average player loses £6 per session after playing for 11 minutes and the average stake doubled after 10pm and 3% of sessions involved the maximum £100 bet, a ceiling that was set in 2005.
After several campaigns aimed at curbing the use of these machines, The Association of British Bookmakers (ABB) has announced a partnership with the Local Government Association (LGA) in the UK in order to ensure that local councils are confident that their concerns over gambling are properly acknowledged.
Betting companies will put mandatory time limit on fixed-odds betting terminals (FOBTs) into place, which is described by campaigners as the “crack cocaine” of gambling.
At the start of a session on a terminal, players will be prompted to set their own time or money limit. Even if they choose not to do so, the machine will show a short warning after 30 minutes of use or once a play racks up losses of £250. The companies will also will also cover 8,000 betting shop with messages about betting responsibly as part of an industry-wide “gamble aware week.”
Betting companies have launched a new £2m responsible gambling campaign intended to remind punters to curb their impulses when gambling. The new watchdog named the Senet Group, whose ranks include Coral, Ladbrokes, Paddy Power and William Hill, have debuted a pair of new TV adverts centered around the message that: “when the fun stops, stop.”
“75% of customers, when hitting a limit, stop immediately or don’t put any more money into the machine. But not enough customers are setting limits.” said Carl Leaver, chief executive of Gala Coral.
“Campaigners would say that problem gamblers were our best customers, actually the reverse is true – they are our worst customers,” he added. “We want people who continue to have fun for month after month, year after year. Our hope is that in introducing these measures, customers will manage their own spending better.”
According to the Responsible Gaming Trust after it took its first in-depth analysis at FOBT that average player loses £6 per session after playing for 11 minutes and the average stake doubled after 10pm and 3% of sessions involved the maximum £100 bet, a ceiling that was set in 2005.
After several campaigns aimed at curbing the use of these machines, The Association of British Bookmakers (ABB) has announced a partnership with the Local Government Association (LGA) in the UK in order to ensure that local councils are confident that their concerns over gambling are properly acknowledged.
September 26, 2014
Coral finalizes deal with UK celebrity blog ahead of royal baby betting frenzy
The frenzy surrounding the Dutchess of Cambridge’s pregnancy and birth to Prince George taught online betting sites a valuable lesson: prepare early.
Coral finalizes deal with UK celebrity blog ahead of royal baby betting frenzyNow that the Dutchess is again pregnant to her second child with the Duke of Cambridge, online betting firm Coral gears up for another round of royal baby betting hysteria by teaming up with British celebrity and novelty betting TV blog, FlashBitch.
FlashBitch is known mostly for her off-the-cuff, sarcastic and oftentimes controversial commentaries on British reality television and related betting. The blog has also gained a reputation for being on top of the landscape of British reality television, turning her into an expert of sorts when it comes to betting on novelty-props related to entertainment.
“Coral make a perfect partner in this respect given their position in the UK high street and enthusiasm to explore new ideas,” Media Skunk Works CEO Paul Reilly said.
The deal with Coral not only makes the online betting site the official betting partner of FlashBitch but it also opens the doors for both parties to new opportunities on making the most of the growing popularity of entertainment and prop-betting markets like the “royal baby”or at in this case, “royal baby 2”.
“Novelty betting has become increasingly popular over the years, thanks to the likes of the X Factor, Strictly Come Dancing, Britain’s Got Talent and so on,” Coral PR Manager Nicola Geady said in a statement.
“However, it’s no longer just talent contests that is attracting money. Last July, royal baby betting exceeded all expectations, with punters betting on the name, hair color and gender of the future monarch. Now that the Duchess of Cambridge is pregnant again, we’re expecting a frenzy of similar heights, with turnover expected to reach a million pounds across the betting industry,” Geady added.
As part of the deal, FlashBitch’s expanded content coverage of entertainment, which will be integrated into Coral’s novelty-bet market, including latest odds and exclusive enhanced offers.
Coral finalizes deal with UK celebrity blog ahead of royal baby betting frenzyNow that the Dutchess is again pregnant to her second child with the Duke of Cambridge, online betting firm Coral gears up for another round of royal baby betting hysteria by teaming up with British celebrity and novelty betting TV blog, FlashBitch.
FlashBitch is known mostly for her off-the-cuff, sarcastic and oftentimes controversial commentaries on British reality television and related betting. The blog has also gained a reputation for being on top of the landscape of British reality television, turning her into an expert of sorts when it comes to betting on novelty-props related to entertainment.
“Coral make a perfect partner in this respect given their position in the UK high street and enthusiasm to explore new ideas,” Media Skunk Works CEO Paul Reilly said.
The deal with Coral not only makes the online betting site the official betting partner of FlashBitch but it also opens the doors for both parties to new opportunities on making the most of the growing popularity of entertainment and prop-betting markets like the “royal baby”or at in this case, “royal baby 2”.
“Novelty betting has become increasingly popular over the years, thanks to the likes of the X Factor, Strictly Come Dancing, Britain’s Got Talent and so on,” Coral PR Manager Nicola Geady said in a statement.
“However, it’s no longer just talent contests that is attracting money. Last July, royal baby betting exceeded all expectations, with punters betting on the name, hair color and gender of the future monarch. Now that the Duchess of Cambridge is pregnant again, we’re expecting a frenzy of similar heights, with turnover expected to reach a million pounds across the betting industry,” Geady added.
As part of the deal, FlashBitch’s expanded content coverage of entertainment, which will be integrated into Coral’s novelty-bet market, including latest odds and exclusive enhanced offers.
June 16, 2014
Coral starts pub marketing offer with Admiral
Admiral Taverns has announced an exclusive partnership with bookmaker Coral to give pub customers free bets during the Brazil World Cup – the first campaign of its kind for both companies. The World Cup Football Jackpot promotion will run in almost 200 selected Admiral Taverns pubs, all of which are within a half-mile radius of a Coral betting shop.
The business building initiative, which is designed to drive footfall to pubs, and awareness and engagement with live televised games in pubs, will give licensees a certain quota of free bets – for both them and their customers.
Admiral commercial manager Simon Eyles, who spearheaded the initiative on behalf of the community pub group, said: “This is about maximising a once-in-four-year event for our licensees and their pubs. The World Cup is a fantastic trading opportunity for pubs all over the country, especially given Brazil’s pub-friendly timezone, and offers licensees a chance to engage with current customers and attract new ones.
“Some in the industry might regard bookmakers as something of a competitive threat but we believe there are some great opportunities to build partnerships, and believe this initiative will serve as a great platform for further collaboration between Admiral and Coral.”
Participating pubs have 200 £1 free bet coupons to offer customers to predict the outcome – win, lose or draw – of 15 matches from the World Cup group stages. Furthermore, during each of England’s three group matches, customers can pick up one of 100 £5 free bet codes to use on their smartphone via the Coral website, when they watch the live England match in the pub. Licensees also have 10 £5 free bets to use themselves, or for their staff, as a thank you for taking part.
Jack Chapman, head of retail sports marketing at Coral, said: “This is the first such promotion Coral has run in the pub sector, and we are delighted to be doing so exclusively with Admiral, who have many great sports pubs across the country. We look forward to seeing how customers and licensees engage with the promotion during England’s campaign in Brazil.”
A range of POS will support the offer in pub, including beer mats, posters, bar runners, leaflets and a bar-top voucher dispenser, and all of the marketing material has been created to complement Admiral’s current world cup promotion, in a similar design.
The business building initiative, which is designed to drive footfall to pubs, and awareness and engagement with live televised games in pubs, will give licensees a certain quota of free bets – for both them and their customers.
Admiral commercial manager Simon Eyles, who spearheaded the initiative on behalf of the community pub group, said: “This is about maximising a once-in-four-year event for our licensees and their pubs. The World Cup is a fantastic trading opportunity for pubs all over the country, especially given Brazil’s pub-friendly timezone, and offers licensees a chance to engage with current customers and attract new ones.
“Some in the industry might regard bookmakers as something of a competitive threat but we believe there are some great opportunities to build partnerships, and believe this initiative will serve as a great platform for further collaboration between Admiral and Coral.”
Participating pubs have 200 £1 free bet coupons to offer customers to predict the outcome – win, lose or draw – of 15 matches from the World Cup group stages. Furthermore, during each of England’s three group matches, customers can pick up one of 100 £5 free bet codes to use on their smartphone via the Coral website, when they watch the live England match in the pub. Licensees also have 10 £5 free bets to use themselves, or for their staff, as a thank you for taking part.
Jack Chapman, head of retail sports marketing at Coral, said: “This is the first such promotion Coral has run in the pub sector, and we are delighted to be doing so exclusively with Admiral, who have many great sports pubs across the country. We look forward to seeing how customers and licensees engage with the promotion during England’s campaign in Brazil.”
A range of POS will support the offer in pub, including beer mats, posters, bar runners, leaflets and a bar-top voucher dispenser, and all of the marketing material has been created to complement Admiral’s current world cup promotion, in a similar design.
October 08, 2013
Gambling Commission rebukes Coral Bookmakers
The Coral bookmaker has been rebuked by the UK Gambling Commission over a recent incident involving money laundering within their retail units.
A man in his thirties that is currently awaiting trial on drug charges spent over £90,000 in the betting shop without being challenged on where the money came from. The Gambling Commission say the operator will have t0 pay back the money as it is almost certainly from illegal activity.
The betting shop in the North East of England is supposed to record and challenge any gamblers that spend in excess of £10,000, a suspicious activity report was filed by Coral staff but nothing else was done in relation to the customer and his high spending rate.
Instead the commission said Coral chose instead to “recognise the significance of the customer from a commercial perspective” – and gave him a complimentary day at the races as a valuable customer.
There are calls in the EU Commission to lower the reporting rate from currently £10,000 to £1,700 however this has not been implemented at present in the UK.
A man in his thirties that is currently awaiting trial on drug charges spent over £90,000 in the betting shop without being challenged on where the money came from. The Gambling Commission say the operator will have t0 pay back the money as it is almost certainly from illegal activity.
The betting shop in the North East of England is supposed to record and challenge any gamblers that spend in excess of £10,000, a suspicious activity report was filed by Coral staff but nothing else was done in relation to the customer and his high spending rate.
Instead the commission said Coral chose instead to “recognise the significance of the customer from a commercial perspective” – and gave him a complimentary day at the races as a valuable customer.
There are calls in the EU Commission to lower the reporting rate from currently £10,000 to £1,700 however this has not been implemented at present in the UK.
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