British online gambling company GVC Holdings recently held talks about a takeover of bookmaker Ladbrokes Coral but discussions ended without a deal, two sources familiar with the matter said.
GVC’s proposal valued Ladbrokes Coral at about 2.7 billion pounds ($3.47 billion), or approximately 140 pence per share, the sources said. GVC was also prepared to increase the value of the deal by approximately 50 pence a share to about 3.6 billion pounds if the results of an ongoing UK government review into gambling were favourable for the industry, the sources also said.
The talks and potential terms were first reported by the Financial Times and come after speculation that GVC had revived its interest in Ladbrokes Coral. The two companies held discussions about a possible deal last year, the sources said.
Britain’s gambling sector has been transformed by a wave of deals as companies try to bulk up so that they can absorb the rising costs of stricter regulation and higher taxation.
Ladbrokes completed its merger with Coral last year, while Paddy Power and Betfair have also merged and GVC bought Bwin.
Ladbrokes Coral shares closed down 0.2 percent at 119.8 pence, giving the company a market capitalisation of 2.3 billion pounds.
GVC, which is also worth about 2.3 billion pounds, has grown quickly under chief executive Kenny Alexander, who has built the business through acquisitions.
GVC is focused on online gaming and sports betting and owns the Foxy Bingo brand. A deal for Ladbrokes Coral would have marked a departure for GVC into betting shops because the bookmaker has about 3,600 sites.
GVC shares closed at 750.5 pence, down less than 0.1 percent.
Source: Reuters.com