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Saturday, 17 November, 2018

GVC bid for Ladbrokes Coral rebuffed as takeover speculation mounts

GVC Holdings have reportedly made a second bid for Ladbrokes Coral
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The City is expecting another wave of consolidation in the gambling industry following reports that online gambling company GVC Holdings have had a second bid for Ladbrokes Coral turned down.

GVC own the Sportingbet and Bwin brands among others and were linked last year to deals involving both Ladbrokes Coral and William Hill.

The Financial Times reported the latest set of talks failed following disagreement over the value of the two companies, with the uncertainty surrounding the government's review of gaming machines exacerbating the situation.

The paper reported that GVC's offer valued Ladbrokes Coral at £2.7 billion but with a possible uplift to £3.6bn depending on the result of the government's review, which could have a profound effect on the betting shop sector.

Analysts at Goodbody said that it was difficult to make any concrete conclusions from the reports.

However, they added on Wednesday: "If the reports are true, it confirms two issues. Firstly, the theme of sector consolidation in the face of increased regulatory pressure is likely to be prevalent for the foreseeable future.

"Secondly, there are significant differences in how people are valuing the potential regulatory impact from the triennial review."

Ladbrokes Coral and GVC declined to comment on the reports. The company's share price fell 1.30p to close at 118.50p on Wednesday.

Consolidation in the betting industry has been a feature of recent years, with the mergers of Ladbrokes and Coral as well as Paddy Power and Betfair two notable examples.

The theme of sector consolidation in the face of increased regulatory pressure is likely to be prevalent for the foreseeable future
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