Backing for MPs who oppose betting link-up

LADBROKE's acquisition of the Coral betting shop chain from Bass is likely to act against the public interest, according to a report commissioned by MPs opposing the merger.

The consultants Economia found the acquisition will reduce competition, disadvantage the customer, and make it tougher for independent betting shops and small chains to compete. The study comes a month before a Monopolies and Mergers Commission report on which Margaret Beckett, Trade and Industry Secretary, will base her ruling on Ladbroke's pounds 375.5m acquisition.

Ladbroke's purchase of the 891-strong Coral chain was completed in May and gives it a 36 per cent share of the UK.retail betting market. The company has already sold 133 shops to satisfy anti-trust concerns. Further disposals could erode the scope for cost-savings.

"My best guess is the MMC will come out and say Ladbroke has got to sell X amount of shops,'' said Roy Owens, an analyst at Merrill Lynch. "One hundred to 200 wouldn't be too bad as the majority of the synergy benefits would still be there. If they had to sell 600 or 700 it would not be good news.''

Ladbroke has said it will reap pounds 10m of savings from the acquisition in the first full year.

The MMC will release its report on 7 July and Mrs Beckett will make a ruling within 20 days.