Ladbrokes and Coral Complete Historic Merger
Ladbrokes Coral Plc began its first day of trading today, as the anticipated merger between Ladbrokes and Coral was finally completed. Two of the leading bookmakers in the United Kingdom have joined forces to create a new corporation valued at around £2.3 billion.
We first reported on this merger back in June of 2015. Although it’s seemed like something of a foregone conclusion for many months, it’s taken until today to be finally formalized. Ladbrokes Coral is officially the largest retail bookmaker in the United Kingdom, with over 3,500 shops throughout the region. William Hill was previously the largest, and they’ve now been pushed into second place.
Ladbrokes Coral will also be a major player in the online gambling industry. Both Ladbrokes and Coral already had a significant online presence, and the merger should enable them to streamline and expand online operations. The two brands will remain separate for now, online and in retail, but that could change in the future. The new company will have its headquarters in Stratford, London, while operational offices will remain in Gibraltar.
John Kelly is chairman of the new company, having previously been chairman of Ladbrokes. He issued the following statement after the finalized merger was announced.
“In uniting these two businesses we are bringing together some of the best known and admired brands in betting and gaming. We believe that no other gambling business has such a strong heritage, with brands that enjoy such broad appeal and a presence that is woven into the fabric of the UK culture as well as overseas regulated markets.”
The group CEO of the new company is John Mullen. He succeeded Richard Glynn as CEO early in 2015. He also released a statement today.
“This is a historic day for the company and one which marks the start of an exciting journey for the business; both Ladbrokes and Gala Coral have demonstrated their ability to compete hard and win in increasingly competitive markets.”
The former Coral CEO, Carl Leaver, is now executive deputy chairman, and the new senior management structure comprises a mix of Ladbrokes and Coral staff. It’s been reported that around 700 jobs could be at risk as the new company seeks to cut costs.
Share prices in Ladbrokes Coral have risen slightly since opening, from 134 up to 138. Independent investment group ShoreCap has placed a buy recommendation on the group, suggesting shares could have a real value of 180.
Ladbrokes Coral begins at 'overweight' with Morgan Stanley https://t.co/78vDmdOMT4
— Digital Look (@DigitalLookNews) November 1, 2016
Ladbrokes Coral are expected to move imminently for a premium listing on the London Stock Exchange.
Although the future mostly looks bright for this newly formed corporation, a potential obstacle could be the impending review of fixed odds betting terminals. These gambling machines are very prevalent in UK bookmaking shops, including Ladbrokes’ and Coral’s, and there have been numerous calls to have them banned.
Although a blanket ban is unlikely, it’s entirely possible that the number of machines allowed per shop could be reduced. It’s also possible that the maximum stakes allowed could be significantly reduced. Such a move would not cripple Ladbrokes Coral by any means, but it would certainly have the potential to dramatically affect a very lucrative revenue stream.
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