Ladbrokes Coral to be taken over by GVC in £4bn deal
High street bookmaker Ladbrokes Coral has agreed to a takeover by online rival and Foxy Bingo owner GVC in a deal worth up to £4bn (€4.5bn).
It comes after the pair said earlier this month that they were in "detailed" discussions over a cash and shares tie-up.
The deal follows two previous attempts at a combination between the pair, with the most recent discussions breaking down in the summer over price and amid uncertainty ahead of the UK Government's gambling review.
The deal will see the creation of an online-led global gambling giant, combining Ladbrokes' high street and online operations with GVC's stable of brands, including Sportingbet and PartyCasino.
Under the terms of the takeover, GVC will own around 53.5pc of the enlarged group and its chief executive, Kenneth Alexander, would take the reins.
It comes amid a wave of consolidation in the sector, which has been under pressure pending the review, which is expected to significantly cut earnings from the lucrative betting machines - dubbed the crack cocaine of gambling.
John Kelly, chairman of Ladbrokes Coral, said: "Ladbrokes Coral board believes that the proposed combination with GVC accelerates our strategy to improve the customer experience, drive faster online growth and build a more diverse and extensive international portfolio of businesses.
"The acquisition has compelling strategic rationale allied to an opportunity to use the best of both from proven management teams and will create material shareholder value.
"It secures earlier delivery of our long-term value potential, which is why the board of Ladbrokes Coral has unanimously recommended GVC's offer."
The duo said the combination will result in cost savings of at least £100m a year.
The initial value of the deal stands at £3.2bn, rising to £4bn under certain circumstances.
According to the terms of the deal, Ladbrokes Coral shareholders will be entitled to 32.7p in cash, 0.141 ordinary GVC shares and a contingent entitlement of up to a further 42.8p.
Based on the £4bn price tag, at 207.2p per Ladbrokes Coral Share, the offer price represents a premium of approximately 19.1pc.
Ladbrokes only completed its £2.3bn merger with Gala Coral in November last year, but it is understood GVC first approached Ladbrokes over a takeover when it was finalising the deal.
Ladbrokes has nearly 3,700 bookies on the high street and more than 25,000 staff, while GVC has a raft of brands after a series of acquisitions, most recently snapping up bwin.party in February last year.
GVC employs 2,800 employees and contractors throughout 15 offices globally.