Ladbrokes Announces £2.3 Million Merger with Coral
Two of the major UK gambling companies have made an announced of a mergand the experts believe that this could be the beginning of a transformation in the industry.
The Ladbrokes' merger of £2.3 with Coral will probably to be the first of a other similar deals as the companies are faced with tougher regulations as well as higher taxes, said Jim Mullen, the chief executive of Ladbrokes, he added that operators would need to be far more efficient.
There were still a number of challenges to be faced with Coral if the deal is to go through. Shareholders approval is still needed and obtaining the green light from Competition and Markets Authority (CMA). This merger could create the largest company of betting shops within the UK.
Ladbrokes expects the CMA will be demanding store disposals to prevent competition concerns. There is also a chance that the regulator might block the deal completely.
Mr Mullen has confirmed that the companies have been in touch formally with the watchdog, but that up to now the CMA has not given feedback on the deal. Thus far, Ladbrokes has already spend £3.8 million on this merger. Mr. Mullen also pointed out that as and when the deal has been competed, the two companies will remain as competitors.
Over the six months to June, Ladbrokes recorded a £51.4 million pre-tax loss compared to a £27.7 million in profit over the same period the previous year. Ladbrokes says the main reason for this was a £58.3 million impairment charge after Mr Mullen had written down Ladbrokes' shop estate and their obsolete software.
Mr Mullen has laid out plans that will boost online customers as part of a three year investment plan, but does not expect profits to grow before 2017.