Ladbrokes-Gala Coral deal clearance might depend on shop sales

Bookmakers Ladbrokes and Gala Coral may need to shed numerous stores if their proposed merger is to go ahead, the competitors guard dog has said.

The Competition and Markets Authority stated a merger of the UK's second and 3rd biggest bookies might restrict competitors on the High Street.

About 350 to 400 stores may need to be sold "for the merger to be conditionally cleared", the CMA said.

The CMA has given until 13 June for reactions to its provisionary findings.

Ladbrokes runs 2,154 wagering shops in Great Britain and 77 in Northern Ireland, while Gala Coral operates about 1,850 betting stores in Great Britain.

The combined group would make it bigger than current market leader William Hill.

Martin Cave, who is chairing the CMA's questions, said: "We have actually provisionally discovered that the merger in between two of the largest bookmakers in the yohaig code nation might be anticipated to lower competitors and option for customers in a big number of regional areas.

"Although online wagering has grown considerably recently, the proof we've seen confirms that a large number of customers still select to wager in stores - and numerous would continue to do so after the merger.

"For these customers, competition comes from the option of stores in their area and it's they who could lose out from any decrease of competition and option."

The CMA stated it was intending to release its last report by the end of July.

Ladbrokes stated: "this promotion code is a considerable action and our focus now will be on agreeing the shop disposals to satisfy the CMA." Ladbrokes shares had leapt 6.5% by the close of trade on Friday.

Gala Coral said it kept in mind that the CMA was "provisionally minded to clear the proposed merger" which it would continue to deal with the regulator on methods to accomplish last clearance.

Analysis: Frank Keogh, BBC Sport racing press reporter:

The face of Britain's wagering shops has actually transformed in the last 20 years - from smoky boltholes with horse racing controling procedures to glossy multi-screen sport outlets where fixed-odds betting terminals are a huge earner.

While critics state the casino-style devices have actually motivated problem bettors, the bookies firmly insist personnel are trained to look out for issues.

The bottom line is the rise of the machines has actually helped keep much of these shops open in a modern-day wagering world where online betting has mushroomed.

And while some shops look destined to be casualties, this proposed ₤ 2.3 bn merger shows there is plenty of cash still to be made in the British wagering industry.

Analysts state the merged company will still have a dominant position even if lots of shops need to be offered.

"We anticipate substantial expense saving will be possible because there will be large areas of overlap and unneeded duplication of functions throughout the combined business," stated Steve Clayton, head of equity research at Hargreaves Lansdown.

Ladbrokes agreed the terms of a ₤ 2.3 bn all-share merger with Coral in July, and the business's investors backed the bet9ja's welcome offer in November.

Ladbrokes earnings hit by writedowns

11 August 2015