GVC and Ladbrokes Coral have finally stepped out into the light and confirmed the speculations going on about the £4 billion mergers.
The agreement says that GVC has a160.9p shares with additional costs of 42.8p included per share. Both of the companies have agreed that the merger that is about to happen will result in saving at least £100 million per year.
The merger will mean that GVC will be the superior owner of 53.5% of the shares from the combined capital. That also means that the 46.5% of the shares will remain in the hands of Ladbrokes Coral shareholders. The Chief Executive position of the combined company is planned to be awarded to the existing CEO of GVC, Kenneth Alexander.
The shareholders that already own Ladbrokes Coral shares will get additional 32.7p in cash for every share, another 0.141 ordinary shares in GVC and a contingent entitlement of a further 42.8p.
Both companies confirmed that the final cost will depend on and be set after the long-awaited triennial review into the gambling industry by the UK government. That is when they both expect the announcement of the implementation of restrictions on fixed odds betting terminals.
Currently, GVC has something less than 3.000 staff in-house and contractors operating from 15 offices worldwide, while Ladbrokes has something less than 4.000 shops and more than 25.000 staff all around the UK.
The CEO of GVC and future CEO of the Merged company, Kenneth Alexander, released a joint statement regarding the merger: "The creation of one of the world’s largest listed sports betting companies, combining a portfolio of established brands, proven technology and leading market positions in multiple geographies, is a truly exciting prospect.
“GVC has a proven track record of creating shareholder value through the successful integration of acquired businesses and the GVC Board believes this transaction will create further value for our shareholders and those of Ladbrokes Coral."
“In a dynamically evolving industry, the transaction creates an enlarged group with the scale, diversity, proprietary technology and management expertise to pursue many opportunities globally.”
John Kelly, Chairman of Ladbrokes Coral added: "The Ladbrokes Coral Board believes that the proposed combination with GVC accelerates our strategy to improve the customer experience, drive faster online growth and build a more diverse and extensive international portfolio of businesses.
“The acquisition has compelling strategic rationale allied to an opportunity to use the best of both from proven management teams and will create material shareholder value. It secures earlier delivery of our long-term value potential, which is why the Board of Ladbrokes Coral has unanimously recommended GVC's offer."
Final details of the entire review are expected for next month, however, back in October, it was said that FOBTs stakes would be cut down from costing £100 to £50 or less.
Jasper Lawler as the Head of research at London Capital Group stated: “The bigger the crackdown on FOBTs, the more the merger makes sense and ultimately, shares of the combined entity would have greater upside potential.”