Desmond Vows to Keep Up Ladbrokes Fight as Coral Deal Passedby
Irish billionaire says resistance to merger is only a start
Deal passed by Ladbrokes shareholders after meeting in London
Irish billionaire Dermot Desmond vowed to keep on fighting against Ladbrokes Plc’s merger with rival U.K. betting-shop chain Coral Group, saying the encounter has only just started even as almost all other shareholders approved the deal.
“If it’s a 15-round battle, it’s only the first round,” Desmond, who owns a 2.8 percent stake in Ladbrokes, told reporters after the extraordinary general meeting in London, where almost all other investors approved the merger. “This is only a start.”
Desmond, ranked by the Sunday Independent as the eighth-richest person in Ireland, has been an open critic of the transaction, saying that Coral’s private-equity investors have the most to gain from it. He says Ladbrokes’ investors have insufficient information on which to assess the deal, with potential uncertainty over betting-shop divestments that may be required. He has also questioned the payment of 75 million pounds ($113 million) to Playtech Plc, Ladbrokes’ gaming software partner.
Speaking after Tuesday’s meeting, Desmond indicated that it may not be the last such gathering of shareholders. The billionaire said he would “very easily” be able to muster support from other investors to get the 5 percent needed to call a further extraordinary meeting. “We can call it immediately in relation to our confidence in the board.”
Desmond also requested that any agreement on betting-shop divestments negotiated with the U.K. Competition and Markets Authority be put to shareholders at a general meeting. His application led to a brief pause in proceedings as Ladbrokes Chairman Peter Erskine consulted with his company secretary outside the room, returning minutes later to say there was no requirement for a subsequent meeting.
Desmond, who sold the Betdaq betting exchange to Ladbrokes in 2013, has said the transaction will probably require significant disposals of betting shops to meet antitrust concerns. Analysts estimate that as many as 1,000 shops may have to be sold or closed, resulting in as much as 70 million pounds in lost earnings, he said at the meeting.
The resolution to approve the merger was passed overwhelmingly by shareholders. Investors owning 96.4 percent of the votes were in favor, Ladbrokes said.
Still, Desmond said those he’s spoken to in recent days have understood his views.
“In these discussions it has become clear that while most have placed their proxy in favor of the resolutions, they have huge sympathy with the points we raised and are voting for the Coral transaction out of a sense of frustration and resignation with the current board and management,” he said. “I share their frustration, but not their resignation.”