Ladbrokes Coral has reportedly rejected a £3.6 billion takeover offer from online gambling group, GVC.
But two insiders have revealed the bid, which would have created one of the world’s biggest gambling companies, is no longer active.
According to the insiders, the discussions failed to eventuate due to a disagreement over the value of each company.
Given the UK government’s impending review of the gambling industry, including a crackdown on the Fixed Odds Betting Terminals (FOBTs), GVC’s proposal reportedly valued Ladbrokes Coral at roughly 140p per share, or £2.7 billion.
However, the online company apparently also proposed an increase of 50p per share if the regulatory review produced a positive outcome.
Ladbrokes Coral has around 3500 high street shops which feature FOBTs. If British lawmakers and anti-gambling groups get their way, the maximum betting stakes will be reduced from £100 to £2. Analysts have estimated that Ladbrokes Coral would incur a £449 million loss in machine revenues in 2018 if the government enforces the reforms.
It’s not the first time GVC has presented an offer to Ladbrokes. The Isle of Man company proposed a tie-up with Ladbrokes last year, but the bookmaker was in the midst of completing a £2.2 billion merger with Coral.
GVC has been proactive in seeking out potential deals including the acquisition of Bwin in 2015. The international company, which also owns Sportingbet, beat out 888 Holdings with a £1.1 billion offer.
It’s not clear if GVC will present another offer following the impending regulatory review expected to take place in the coming months.
Fresh calls for reduction in FOBTs maximum stakes
The fight to reduce the maximum bet stakes on machines located in UK high street shops has been ongoing for quite some time. But a new report published by the Centre for Social Justice (CSJ) think tank reignited the debate on the regulatory change. It states the reduction will reduce social harms caused by problem gambling.
The Association of British Bookmakers (ABB) has released its response to the new report, labelling the CSJ’s research as inaccurate in a post on the Conservative Home website.
“It is unfortunate that an influential think-tank such as the Centre for Social Justice (CJS) produced a report that includes so much inaccurate and misleading information about gaming machines in betting shops,” the post reads.
“Had the CSJ considered the numerous official, independently verified third party reports and evidence on gaming machines they would have written a very different report.”
The ABB, which is responsible for the rights of off-course bookmakers, also details the detrimental impacts of reducing the stake by such a huge amount including the loss of 21,000 betting shop employees.
The trade group pointed out that the problem gambling rates cited in the CSJ report are incomplete since they do not include the fact that the statistics have remained stable since the machines were first introduced.
The ABB also referred to research performed by NatCen which states that ‘focusing on one element of gambling alone—such as the reduction of stake size—will not provide a better prediction of problem gambling or decrease the rates of gambling harm.”
“It is disappointing that the CSJ did not research all the evidence available,” the ABB states at the end of the post.
“We hope that in future, the CSJ reaches out beyond those with their pre-determined views on FOBTs and explore the evidence before reaching their conclusions.”
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