Bookmakers Ladbrokes and Gala Coral agree $3.4 bln merger

Ladbrokes, the beleaguered gambling company, has agreed a £2.3bn merger with Gala Coral to create Britain’s biggest bookmaker. The combined business, which will be listed on the stock exchange and called Ladbrokes Coral, will have a market capitalisation of £2.3bn. It will retain its portfolio of brands, allowing for effective cross-brand marketing across a larger customer base, helping accelerate the growth of its online business.

Mor Weizer, Chief Executive Officer of Playtech plc said: “Both Ladbrokes and Coral are key licensees of the Group and we have been delighted to assist Ladbrokes in the turnaround of its online operations, again demonstrating the strength of Playtech’s turnkey offering”. Ladbrokes in particular was slow to adapt to the online betting revolution sparked by the emergence of platforms such as Betfair Group Plc, and has seen online rivals grab a bigger share of the market, while also being weighed down by changes in tax laws. Gala’s bingo business is not part of the tie-up. Separately, Playtech has committed to subscribe for approximately 22.9 percent of the 9.99 percent equity placing announced by Ladbrokes earlier today. Gala chief executive Carl Leaver will become executive deputy chairman.

Andy Hornby, who left his role heading HBOS following the financial crisis in 2008, is set to be named chief operating officer of the merged gaming company, with a deal potentially to be announced as early as Friday, according to sources cited by Sky.

Ladbrokes chairman Peter Erskine said the deal was a “major strategic step” for Ladbrokes.

The appointment of Hornby, who joined Gala Coral in 2011, is likely to prove controversial although he will not sit on the main board of the company.

The move brings together 2,100 shops from Ladbrokes and 1,845 from Coral in the UK. Without making any disposals, the new company would have more than 4,000 shops.