Attempt to derail Gala Coral Ladbrokes merger fails
News on 20 Jun 2016
News on 20 Jun 2016
Irish billionaire and 2.8 percent shareholder in Ladbrokes, Dermot Desmond has lost the latest round in his struggle to derail the proposed Ladbrokes – Gala Coral merger.
The appeal board of the UK Takeover Panel has ruled against Desmond’s latest protest against the merger, which hinged on the influence of software provider Playtech plc, which has a 9.7 percent share in Ladbrokes.
Desmond took exception to a deal entitling Playtech to GBP 40 million on completion of the merger in the form of Ladbrokes’ shares, and a further guaranteed GBP 35 million in cash payable on the attainment of specific milestones, but at the very least within 42 months of the merger.
That deal was announced on the last day prior to the merger being approved in the UK, according to UK business news reports.
“It is clear that Ladbrokes has failed to adequately disclose the basis for the extraordinary payment to Playtech,” Desmond claimed at a general meeting called to vote on the major last year. “It was only in response to our requests that the Playtech amendment agreements were belatedly published on the company website.”
In the event, Desmond failed to muster sufficient support for his opposition to the merger, and he resorted to an appeal to the Takeover Panel, requesting a review on Playtech’s merger position and whether those involved in the merger deal had provided full information regarding the new contract.
Following its review, the Takeover Panel concluded that regardless of information disclosed Playtech’s GBP 75 million contract would have had little influence on Ladbrokes shareholders decision to approve the merger.
‘The Panel concluded that the agreement was through the regular course of business, and that the necessary disclosures were made at the time.
“The circular could have given more contextual information about the justification for the GBP 75 million payment, but… if there had been fuller disclosure, there is no rational basis for concluding that the outcome of the shareholders meeting could have been different,” the Panel found.
