Ladbrokes surges as punters bet on Gala Coral merger
Shares in British bookmaker Ladbrokes jumped by more than 10pc yesterday after it confirmed it was in merger talks with rival Gala Coral.
It comes as Ladbrokes here is battling to retain its Irish business which is in Examinership.
Irish rival Boylesports is lining up a €25m bid to buy the Irish business out of the insolvency process.
Meanwhile, in the UK Ladbrokes chief executive Jim Mullen confirmed a tie-up with Gala Coral, could be on the cards.
"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," he said in a statement.
Ladbrokes' board has yet to decide if the deal was "strategically attractive," he said.
If the discussions advance, Ladbrokes may undertake an equity placing to strengthen the balance sheet of the combined company, the statement said.
Ladbrokes and Gala Coral would have around 4,000 betting shops and also seek to close the gap on market leader William Hill.
Gambling companies are facing tighter regulations and higher taxes in Britain, fuelling deal-making in the sector as players seek to cushion the impact by creating larger businesses. Shares in Ladbrokes traded almost 11pc higher at 135.3p in London following confirmation of talks.
Ladbrokes said the proposed combination, if completed, may be classified as a reverse takeover of Ladbrokes.
Back in Ireland, Ladbrokes is looking to bring its business out of here out of Examinership but rival Boylesports is also in the mix. Ladbrokes Ireland had a turnover of €449m in 2013, with 196 shops and 840 employees.