Sources familiar with the negotiations said Ladbroke is close to selling the 833 outlets in a deal worth more than pounds 363m - the price it paid to buy Coral from the brewing giant Bass in May.
The revelation came as the three shortlisted bidders - the state-owned bookmaker Tote and two venture capitalist groups, Cinven and Morgan Grenfell - were preparing to put in their final bids for Coral, the UK's third largest bookmaker.
The profit on the disposal would be a coup for Ladbroke, which was odds- on to sell Coral at a loss after the Trade Secretary Peter Mandelson blocked the acquisition on competition grounds. City and industry experts believed that Mr Mandelson's decision to allow just six months for the disposal and his preference for a single buyer would force Ladbroke's chief executive Peter George into a loss-making deal.
However, it is understood that the leisure group would retain around pounds 40m profits made by Coral in the last financial year. According to industry sources, the chain had a buoyant second half and is set to more than double the pounds 17m posted in the first six months.
In addition, Ladbroke, which is the UK's largest bookmaker, will keep 58 Coral shops in the Republic of Ireland, eight outlets in Jersey and a 12 per cent stake in the racing satellite broadcaster SIS. These assets have been valued at around pounds 30m and would give Ladbroke a pounds 70m profit even if the final bids fall below pounds 363m.
Further profits will depend on the winner of the race for Coral. Cinven and Morgan Grenfell, whose bids are fronted by industry figures, are believed to have offered between pounds 360m and pounds 375m. The Tote, Britain's fifth largest bookie with around 220 shops, is thought to have increased its original bid of pounds 345m, but it is still below the two venture capitalists' offers.
Industry sources said the Coral sale was likely to be announced before the end of the year.Reuse content