British bookmaker Ladbrokes said yesterday that it was in talks with the board of Gala Coral Group Limited to combine their businesses and list the entity on London's stock market.
Ladbrokes, which issued a statement saying it was confirming the discussions in response to press speculation, said the talks are to combine the entities of Ladbrokes and Coral Retail, Eurobet Retail and Gala Coral's online businesses.
"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 said.
Jim Mullen, chief executive of Ladbrokes, said in the statement, "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."
Mullen said that the Ladbrokes board has yet to decide if the deal is "strategically attractive" and can be presented to shareholders on appropriate terms.
If the discussions move forward, Ladbrokes may undertake a non pre-emptive equity placing to strengthen the balance sheet of the combined company, the statement said.
Ladbrokes said the proposed combination, if completed, may be classified as a reverse takeover of Ladbrokes.
Ladbrokes' Irish arm has also been the subject of possible takeover talks after going into examinership in April. The Sunday Independent reported last weekend that Irish bookmaker Boylesports will proceed with a €25m-plus takeover bid for Ladbrokes' Irish arm, despite losing a legal challenge seeking sensitive information about the British bookmaker's operations here.