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LADBROKES AND CORAL MERGER IS ON

Friday July 24,2015  : LADBROKES AND CORAL MERGER IS ON (Update)
 
Terms agreed...but there has been some criticism over one management appointment.
 
The Ladbrokes and Gala Coral merger is on following extensive negotiations in recent weeks
 
It will see the formation of a GBP 2.3 billion group that is expected to overtake William Hill as the biggest online and land gambling group in the UK market.
 
Ladbrokes Coral will have total net revenue of GBP 2.1 billion and underlying earnings of GBP 392 million, while the deal is expected to bring savings of GBP 65 million a year.
 
To fund the deal Ladbrokes will offer 93 million new shares to investors, representing 10 percent of the company.
 
Ladbrokes chairman Peter Erskine said Friday: “This is a major strategic step for Ladbrokes which firmly accelerates our strategy to improve the customers’ experience and build recreational scale.
 
“Ladbrokes and Coral are two highly complementary businesses, with rich heritage and brand presence across the UK and internationally.
 
“Together, we will create a leading betting and gaming business combining strong brands with an attractive multi-channel offering and an extensive national and international coverage."
 
Jim Mullen, chief executive of Ladbrokes, will retain the position at the new business while Gala Coral boss Carl Leaver will be executive deputy chairman for 12 months after completion of the deal.
 
But the appointment as Chief Operating Officer of the merged group of Andy Hornby has come in for flak in the British media, which has resurrected his failures whilst the CEO of the Halifax Bank of Scotland several years ago during which he allegedly oversaw the lender’s near-collapse in the financial crisis.
 
A report by the Parliamentary Commission on Banking Standards found that Hornby was ‘unable or unwilling to change course’ at HBOS after his predecessor Sir James Crosby set the bank on the road to ‘disaster’.
 
MP Andrew Tyrie, chairman of the Treasury Select Committee, put the demise of HBOS down to ‘catastrophic failures of management, governance and regulatory oversight’.
 
A separate report by the Prudential Regulation Authority and Financial Conduct Authority, which is also expected to expose the disastrous blunders of Hornby and Crosby as well as former chairman Lord Stevenson, has been mired in legal wrangling and is now not expected to be published until later this year.
 
Hornby left HBOS after it was rescued by Lloyds Bank during the banking crisis in a deal that triggered a GBP 20.5 billion bailout from the taxpayer. He subsequently joined Alliance Boots as CEO before he was appointed in 2011 as chief operating officer at Gala Coral.
 
He will apparently not sit on the merged company board of directors.



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