Shares in high street bookmaker Ladbrokes (LAD) soared more than 15 per cent after the company confirmed it was in talks with competitor Gala Coral over a possible merger. Other than ongoing talks, Ladbrokes hasn’t revealed any other certainties. But new chief executive Jim Mullen said he might postpone a planned presentation for investors – which was supposed to detail his new strategy for the group’s future – depending on how discussions progress. The original presentation was scheduled for 30 June.
Ladbrokes said, should the deal go ahead, the new group would intend to list on the London stock exchange, and it could offer a batch of new shares to bolster the balance sheet. For now, Gala Coral is owned by a handful of private equity firms, and a once-mooted £2bn float this autumn now looks to be on the back burner.
Historically, the reverse has happened, with Ladbrokes trying to take over Coral. In the late 1990s it offered £363m to the group’s owners (then brewing company Bass) but the deal was blocked by Peter Mandelson in 1998 – at that time trade and industry secretary – as his first major decision on competition policy.
