Ladbrokes, one of the major gambling operators in the UK, said on Thursday that it is still committed to the proposed £2.3-billion merger with rival company Gala Coral and encouraged investors to vote in favor of the deal at the annual General Meeting next week.
Ladbrokes’ comments came a day after Irish billionaire Dermot Desmond, a high profile investor in the gambling company, attacked its management in an open letter, saying that the proposed merger would be bad for Ladbrokes shareholders.
Mr. Desmond said that investors have “passively” accepted the bad things that have happened to the company over the past decade, including the continued loss of value. According to the Irish businessman, Peter Erskine, Chairman of Ladbrokes, and John Kelly, Senior Non-Executive Director and board member, have been leading the bookmaker “down the disastrous path” to a merger that would result in its death as an independent company.
Mr. Desmond also noted in his letter that Coral shareholders will be the ones to benefit the most from the deal, provided that it is voted in favor of by investors.
Commenting on the Irish billionaire’s accusations, Ladbrokes released a short statement earlier today, saying that it has had “significant dealings” with him. Mr. Desmond has been a shareholder in the gambling company for the past nine years. Being the founder of betting exchange BETDAQ, which Ladbrokes had purchased, means that the businessman had also become a commercial partner of the popular bookmaker.
Ladbrokes further noted in the Thursday statement that it believes shareholders will acknowledge the attraction of the proposed deal and will vote in its favor at the annual General Meeting, scheduled for Tuesday, November 24. The gambling operator pointed out that the merger would secure the company with a the potential to expand its online division more quickly.
If merged together, Ladbrokes and Gala Coral would form what would be UK’s biggest chain of betting shops. In addition, the two companies would create a diverse and extensive portfolio of international regulated businesses. Labrokes further noted that contrary to what Mr. Desmond claimed in his letter, the deal would result in considerable cost synergies that would most certainly underpin shareholder returns. Last but not least, the gambling company said that it would be able to provide its services through “an enhanced and integrated technology platform.”
Ladbrokes also stated its opinion about Playtech and its participation in the upcoming vote on the merger, a topic that Mr. Desmond, too, dwelt upon in his letter. The gambling operator said that the software developer founded by Israeli billionaire Teddy Sagi is not and would not be considered an independent shareholder and any votes it casts on Tuesday regarding the merger would not be counted.
