Gambling operators Ladbrokes and Coral have agreed to offload a total of 359 high street betting shops in order to be given the green light to complete their £2.3-billion merger. Rival operators Betfred and Stan James will buy the sites in question for the amount of £55.5 million.
Under the purchase deal, Betfred will acquire 322 of the betting shops for £55 million and Stan James, which is primarily known for its online business, will buy the remaining 37 stores for £500,000.
It was also announced that Ladbrokes will sell 185 betting shops and Coral will dispose of 174. Each of the gambling operators will receive an amount corresponding to the profitability of the stores sold. Both Ladbrokes and Coral said that they will use the money to repay debt.
Following the sale, the two gambling operators now manage a collective of 3,700 betting outlets. Once their merger is completed and the new Ladbrokes Coral operator is established, it will be the largest one to operate high street shops across the UK.
What is more, according to previous estimates by Morgan Stanley, the newly established gambling company will hold a 45% market share in the UK by the number of betting shops managed and a 47% one by the revenue generated.
As for Betfred, it will boost its presence on UK’s high streets by what has been estimated as a quarter. Following the recent acquisition of Ladbrokes and Coral shops, the number of such facilities managed by the gambling operator will rise to an approximate of 1,700.
Earlier this year, UK’s Competition and Markets Authority ruled that Ladbrokes and Coral would have to dispose of between 350 and 400 betting shops around the nation so as to be allowed to proceed with their merger. The regulator cited fears that if no stores were sold, this would lead into a high concentration of such facilities in a number of local areas. In other words, the move was deemed necessary so as for monopoly in such areas to be prevented. It could be said that this has been the last major obstacle before two gambling companies in their efforts to combine operations.
Commenting on the purchase deal, Ladbrokes CEO Jim Mullen said in a statement that now as they have cleared the last big hurdle, they will be able to focus on sealing the merger and delivering on the opportunities it offers them.
Gala Coral Group CEO Carl Leaver added that they hope to complete the merger before the end of this month. The executive also explained that other interested parties had offered higher price for the betting shops but that they had selected Betfred and Stan James due to the certainty they had delivered, something both Ladbrokes and Coral considered instrumental to their consolidation’s completion.
