Ladbrokes’ shareholders have voted in support of the £2 billion merger with Coral following a disdainful public attack on the “abysmal” board by Irish billionaire Dermot Desmond.
‘Smarter deals’
At one point, Desmond even alluded to bidding for Ladbrokes himself, depending on how low prices were. He stated that there “were smarter deals the firm could have done” adding “there is a price that every company is worth bidding for. This is not the announcement of a takeover but Ladbrokes at 30p might be good value.”However, 90% of shareholders have supported the deal with their rivals Coral.
Current management at Ladbrokes
Desmond is worth around €1.5 billion (£1.05 billion) and is labelled Ireland’s Warren Buffett having created his fortune over forty years. Desmond himself has a 3% stake of Ladbrokes stock and in a rare public appearance revealed he felt “frustration and resignation with the board and current management.” He has called the companies’ attempt to close the gap on online rivals “abysmal”, adding: “simply put, the board and management have not earned the right to manage the transaction of the deal which could be a deal too far for Ladbrokes”.
Could Ladbrokes lose millions?
The billionaire is concerned that Ladbrokes could lose millions due to the sales of betting shops, a decision forced upon them by the Competition and Markets Authority.
He said: “That will involve a negotiated settlement between Ladbrokes and the authority that could see the mandatory disposal of a material amount of the retail estate, estimated by analysts at between 400 and 1000 shops and up to as much as £70 million in lost earnings.”
Further meetings
Desmond asked Ladbrokes to conduct another shareholders meeting after the CMA settlement to cement approval for the merger, however chairman Peter Erskine shut the idea down.Desmond stated: “It is clear to me that the GalaCoral and Playtech shareholders are the big winners here with Ladbrokes’ shareholders once again paying the price of management ineptitude.”
Competition
He went on to compare Ladbrokes’ fortune to their closest competitors. “The UK online market is estimated to have grown at 20% per annum over a 10-year period,” he said. “Shareholders won’t need me to remind them of the decline in the Ladbrokes share price, nor the fact that peers William Hill, Betfair and Paddy Power are 91%, 100% and 300% respectively ahead over that same period.”