Betting chains Ladbrokes and Coral have agreed the sale of 359 shops, allowing the £2.7 billion merger of the two companies to proceed.
Ladbrokes and Coral called the agreement the “last significant hurdle” ahead of their merger, after competition regulators rules that the two groups must sell between 350-400 shops in order to be cleared.
322 shops will be bought by gambling chain Betfred, with online betting brand Stan James buying the other 37 for a total of £55.5 million. Jim Mullen, the chief executive of Ladbrokes, commented:
“The sale of these shops will clear the last significant hurdle to delivering on the merger with Coral and paves the way for our focus on completion and quickly delivering on the opportunities the merger offers.”
Ladbrokes will sell 185 of its stores, with Coral selling the other 174. The £55.5 million earned from the deal will be used to repay debt.
The Sunday Times reported over the weekend that the merger between Ladbrokes and Gala Coral could be confirmed as early as this week, despite only being officially announced last week. The report also suggested that privately-owned Gala Coral will hand a windfall of £50m to senior staff should the deal go ahead, adding that the company is “set to seal its alliance with struggling rival Ladbrokes this week”.
However, Ladbrokes advised that “there can be no certainty that the discussions between Ladbrokes and Gala Coral will lead to any agreement concerning the possible merger or as to the timing or terms of any such agreement and there can be no assurance that, even if reached, any such agreement would be completed.”
Morgan Stanley analysts have previously estimated the merged company would have a 45 market share, owning around 3,700 betting shops and becoming Britain’s largest high-street bookmaker.