Ladbrokes and Coral open merger talks although any deal could take at least twelve months
Two of the “Big Three” bookmakers in the United Kingdom have begun talks over a potential merger, with high street bookmakers and online favoruties Ladbrokes and Coral considering whether to join forces and become a bookie “super power”.
Representatives from the two operators have opened initial merger talks and forming a business coalition could see the new business hold over 4,000 betting shops which would put William Hill in the shadow.
The discussions focus on combining Ladbrokes with Coral Retail, Eurobet Retail and Gala Coral’s online firms such as Coral.co.uk, with all parties naturally preaching caution although it is news that is sending shockwaves through the industry.
Shares in Ladbrokes rose more than 11% after the announcement.
“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,” chief executive Jim Mullen said.
While this business speak doesn’t mean a great deal to us, it appears as though Ladbrokes and Coral have decided that they can be “stronger together”, with the online operations struggling to currently compete with bet365 and William Hill.
For those with long memories, Ladbrokes tried to buy Coral in 1998 although the landscape was a lot different in those days. Online betting had barely taken off and it was focused more on the retail and telephone betting side of things.
Mullen has only become chief executive of Ladbrokes recently, replacing Richard Glynn who struggled to grow the business despite holding a strong track record which had previously seen him improve the fortunes of Sporting Index.
Mullen continued: “Since becoming CEO my focus has been on a more aggressive plan to build digital scale and grow our recreational customer base across all channels, which is key to creating a more sustainable and growing Ladbrokes. My plans are well advanced and I look forward to presenting them to shareholders”.