British based betting and gambling company Ladbrokes plc have recently announced that they have reached a decision to merge with their long-time rival the Gala Coral Group. Under the new terms the company will now be named Ladbrokes Coral with current Ladbrokes chief executive Jim Mullen set to become CEO of the new merged company.
This comes 18 years after their previous attempt of a merger in 1998 when then Trade and Industry Minister Peter Mandelson blocked the planned deal on the grounds that it would dominate the industry. This may seem difficult to fathom now but this before the true growth of the internet and the birth of other online casinos and betting brands.
Both companies rank high among our online casino reviewers but the logic of the merger is to create a company that will stand a better chance of competing with the online giants. The belief is that together they can create and leading betting and gaming business and the transaction will provide an attractive opportunity to generate considerable value for both sets of shareholders.
Between them, Ladbrokes and Coral has some of the biggest brand games in their respective online casinos including Deal Or No Deal, Marvel’s Incredible Hulk, Spider-Man and Iron Man and Monty Python’s Spamalot while existing sub brands, such as Gala Bingo, are set to remain unaffected and continue as normal once the merger is finalised and official.
Ladbrokes are set to offer 93 million new shares to their investors in order to fund the deal. Previously Gala Coral have been owned by a number of private equity firms that include Apollo Global Management, Cerbeus Capital Management, Anchorage Capital Partners and Park Square Capital. Following the new deal the current private equity owners will own 48.25% while the remainder will be held by Ladbrokes shareholders.
The deal is expected to be all tied up by the end of the week and existing members of both brands should remain unaffected in the time being.