Ladbrokes and Coral Talk Potential Merger

The British sports betting company Ladbrokeshas confirmed that it was in talks with Gala Coral group about possible merger.

Even though it was confirmed late Monday that Ladbrokes and Gala Coral group are currently discussing a potential merger, Ladbrokes warned shareholders that there is no guarantee that discussions will lead to a deal.

If the deal does go ahead Ladbrokes and Gala Coral group merger would create Britain’s largest bookmaker by a number of betting shops. The deal would create strong company which would have more than 4,000 betting offices. The market leader William Hill has almost 2,400 betting offices, meaning the combined company would be the UK's largest betting operation.

As it was reported, the combined company would list its shares on London Stock Exchange. Due to the news of potential merger, shares in Ladbrokes jumped 20%.

Jim Mullen, who has joined Ladbrokes as the CEO three months ago, said that his focus is to grow their customer base across all channels.

Ladbrokes attempted to purchase Coral back in 1998 but failed as their planned takeover was blocked by the government due to the competition concerns.

The Ladbrokes is having hard time keeping up with its rivals in the era where customers are gambling via mobile phones and tablets, more than they gamble in betting shops. The demand of online gambling is certainly increasing and it is well known that Ladbrokes has not been the strongest in these particular areas. For these reasons, the deal with Coral would be strategically attractive to Ladbrokes. The combined company would have an opportunity to focus on promoting online services.

Gala Coral Group confirmed the talks about potential merger and it was described by Ladbrokes as company with attractive future potential. Gala Coral is currently looking into strategic options and initial public offering, it was reported.

Coral offers sports betting at more than 1,800 retail locations in Britain with another 870 in Itally. Coral also offers online gambling such as online sports betting, casino games and bingo at 132 locations in Britain.

Ladbrokes also offers sports betting and casino games online and offers sports betting at about 2,700 locations in Belgium, Ireland, Spain and Britain. The company has about 13,000 employees in Britain and it has posted £1.16 billion in revenue in 2014.