GVC has detailed a proposed purchase of bookmaker Ladbrokes Coral that could be worth up to £4bn.
Under the terms of the deal the online gaming firm, who also has Bwin as well as the Party and Foxy brands in its stable, would own 53.5% of the proposed combined group.
It has also been detailed that the final price of any deal is dependant of the governments triennial review into Fixed Odds Betting Terminals (FOBTs).
The Department for Culture, Media and Sport has stated a cap on the stake sizes available on the gaming machines needs to be implemented, with a cut from the current £100 maximum to between £2 and £50 mooted.
It is believed a combination would create ‘a fast-growing, diversified, international online and retail sports betting led gaming group.’
Kenneth Alexander, CEO of GVC, is set to take charge of the enlarged group should the transaction proceed, and he said: “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.
“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.
“GVC has a proven track record of creating shareholder value through the successful integration of acquired businesses and the GVC Board believe this transaction will create further value for our shareholders and those of Ladbrokes Coral.”
For each share owned by Ladbrokes Coral shareholders, they are set to receive 32.7p in cash and 0.141 ordinary GVC shares, in addition to a contingent value right, dependant on the FOBT review, worth up to 42.8p.
John Kelly, Chairman of Ladbrokes Coral, added: “In its relatively short time as a merged entity, Ladbrokes Coral has demonstrated why scale can be so effective in this market.
“The management team have delivered a very successful merger that has created a leading betting and gaming business built on strong brands well positioned in key markets.
“We have a leading multi-channel offer that utilises our retail and online businesses and offers us a promising future.
“Notwithstanding that, 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.”
The GVC offer values Ladbrokes Coral at 160.9p per share, equating to approximately £3.2bn, with contingency fees of up to 42.8p per share meaning the final price could rise to almost £4bn.