Ladbrokes’ chief executive has shrugged off competition fears over a takeover of Coral – which would give the enlarged firm nearly half of the UK’s betting shops.
Shares in Ladbrokes surged more than 14 per cent in the wake of Jim Mullen’s first big move since taking the reins in April. The two companies have 4,000 of the UK’s 9,000 betting shops between them – as well as the third largest online business.
A tie-up between the brands was rejected in 1998 by Peter Mandelson, the then Trade and Industry Secretary.
Mr Mullen told The Independent: “That was back then. The dynamic is quite a different one from where it was. You’ve got a whole online market that wasn’t there for a start, so that has a major influence. But to be clear – there is a competition process to continue and we will liaise with authorities as appropriate.”
Nick Batram, an analyst at Peel Hunt, warned: “If talks proceed, the Competition and Markets Authority would have much to say about any proposed transaction.”
Mr Mullen added that the main point was “scale”, with savings from the combination likely to be ploughed into boosting its online offering. The deal will almost certainly, however, lead to job cuts among more than 29,000 staff employed by the firms.
The deal adds to the frenzy of takeover activity in the sector as firms respond to tax hikes on online betting, with 888 and Bwin.party the subject of takeover bids this year. 888 rejected William Hill’s advances and is now bidding for Bwin.
Shares in Ladbroke rose 17.9p to 140p.Reuse content