Ladbrokes and Gala Coral told to sell shops for merger clearance

Bookmakers Ladbrokes and Gala Coral will have to sell between 350 and 400 shops to win clearance for their UK merger, the British competition regulator has said.

Shares in Ladbrokes rose to an 11-week high after the findings by the UK’s Competition and Markets Authority, which were less onerous than some analysts had feared.

They surged as much as 10% at one stage.

In provisional findings, the CMA said a tie-up between the second- and third-largest bookmakers may give rise to competition concerns in a large number of local areas.

“In order to resolve these concerns, around 350 to 400 shops may have to be sold for the merger to be conditionally cleared,” it said.

Ladbrokes operates 2,154 betting shops in Britain and 77 in the North. Coral operates around 1,850 betting shops in Britain.

The combined group will overtake market leader William Hill.

Ladbrokes agreed the terms of a £2.3bn (€2.99bn) all-share merger with Coral in July.

“Our focus is to continue working with the CMA to progress the merger and find a buyer or buyers to deliver the remedies,” a spokesman said.

Gala Coral also said it would continue to work with the CMA in order to agree the remedies.

Analysts at Credit Suisse said they had estimated 395 sales would be required, although there had been forecasts in the market for significantly higher numbers, ranging from 400 to 1,000.

“Many had concerns that the deal would be blocked completely based on national concerns arising from the expected large shop estate of the combined entity,” they said.

Reuters