Newly merged UK gambling operator Ladbrokes Coral may be looking to further expand its operations and global presence. It was reported earlier today that the British gambling behemoth is interested in acquiring its Australian counterpart Tabcorp. According to media reports, Ladbrokes Coral has hired advisers to prepare a takeover bid and one is expected to be made in the weeks to come.
Gambling operators Ladbrokes and Coral completed their £2.3-billion merger earlier this month. They created a combined entity with multi-channel operations as well as presence and leading positions in a number of regulated jurisdictions. The newly formed gambling company currently manages UK’s largest chain of high street betting shops. There are more than 3,500 such facilities to be operated under the Ladbrokes Coral brand, with those being located across England, Wales, and Scotland.
Tabcorp is one of the leading gambling operators in Australia with multi-channel and multi-brand presence in the local market. It was announced last month that the company was negotiating a A$9-billion merger with its biggest Australian rival – Tatts. Together the two companies would create the largest gambling entity in their domestic country with enterprise value of more than A$11 billion and estimated annual revenue of over A$5 billion.
Although the combination between the two operators is yet to be completed, Tabcorp announced earlier this week that it had purchased a 10% stake in its rival to facilitate the future merger.
The Australian operator’s market cap currently stands at A$3.87 billion (£2.3 billion). If it accepts Ladbrokes Coral’s takeover bid, this would result in the creation of a £5-billion international giant at the time of extreme competition in the global gambling market. It was reported earlier today that the British gambling operator was not interested in acquiring Tatts, so Tabcorp may find itself in the uncomfortable position to choose between two suitors.
Ladbrokes Coral declined to comment on the latest reports.
Ladbrokes approached Tabcorp with an acquisition offer back in 2013, looking to extend its footprint in the Australian market. However, the UK operator’s bid was quickly rejected by its Australian counterpart. The latter was not looking to enlarge and expand at that time as it had already consolidated its leading position in the local market, Tabcorp CEO David Attenborough told media earlier this year.
However, tough times may be coming for Australia’s gambling market, particularly its online segment with top country officials calling for amendments in the existing gambling laws. Under a recently proposed legislation, the Australian government may launch a serious crackdown on offshore gambling operators, with Ladbrokes Coral being one such operator.
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Consolidation has lately become one of operators preferred means to cope with tougher regulations, increased costs, and high competition. This is why the UK company’s reported bid to acquire Tabcorp may be coming as an attempt to secure its future position and profitability in the Australian market.
