Despite Dermot Desmond’s last ditch attempt to derail its £2.2 billion merger with Gala Coral, Ladbrokes shareholders are reported to have voted in favour of the deal this morning.
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Desmond who owns a 2.8% stake in the company, detailed that he felt that the merger would only benefit stakeholders in Gala Coral and gambling services provider Playtech.
The transaction, announced in July, will give control to Coral’s private-equity owners, he wrote in a letter to Ladbrokes shareholders last week.
Speaking at a general meeting called to vote on the bookmaker’s proposed merger with Gala Coral, the billionaire financier said the merger “could be a deal too far for Ladbrokes shareholders”.
Desmond continued his criticism of the deal and of Ladbrokes’ board and management.
Another issue raised by Mr Desmond is the approval required by the United Kingdom competition regulator, the Competition and Markets Authority (CMA), which could see the merged company have to dispose of between 400 and 1,000 shops, which could equate to as much as £70m in loast earnings.
“Total profit before tax has declined nearly 40% in that period”. Had it not been for a £90m increase in contribution from FOBT’s, profits would have almost been wiped out entirely.
The company won shareholders’ backing for the planned merger, overcoming opposition from Mr Desmond. “Simply put, the board and the management team have not earned the right to be entrusted with the negotiation and completion of this deal”, he said. The Ladbrokes board defended Hornby’s position when asked about his role by a shareholder at the meeting.
Mr Desmond said one option would be to convene another shareholders meeting, for which he would need the support of the holders of 5% of the shares.
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Desmond has previously complained to the Takeover Panel, which polices takeovers, about disclosure of information.
