We’re here for the Coral and Ladbrokes merger stakes. They’re under starter’s orders and they’re… hang on. What’s this? It seems there’s a chap running over to the stalls. He seems to want to prevent the race from going ahead. Has there ever been such an scene on a British racecourse?
That man would be billionaire investor Dermot Desmond, Ireland’s answer to Warren Buffett who sold betting exchange Betdaq to Ladbrokes, and has been a long-term shareholder in it.
The problem he has with the merger is that he thinks that it does a lot more for Coral than it does for Ladbrokes. He also says that the profits lost from up to 1,000 betting shops that will have to be sold to satisfy competition watchdogs could easily outweigh the £65m of promised cost savings. And he points out that software company Playtech will benefit from what he sees as an entirely too generous settlement of its software deal with Ladbrokes.
All salient points, worthy, at the very least, of discussion, even if many analysts don’t see any other options for a Ladbrokes that once competed at the highest level but has more recently been reduced to low rent races at cosy country tracks.
The trouble with Mr Desmond’s intervention is that his timing is terrible. The deal was announced in July, and so he has had ample time to make his case, launch his website (saynotocoral.com) and attempt to kill the deal. As it is, there are only a matter of days left, and the transaction has acquired a momentum that appears all but impossible to stop. The race looks all but certain to be run whether he likes it or not.
