Doubts over Ladbrokes acquisition attempt on Tabcorp

Despite the fact that neither Ladbrokes nor Tabcorp have commented on rumours that they are discussing a possible merger (see previous  reports), industry analysts have been examining the possibilities of such an industry-changing move, which has the potential to create a GBP 5 billion online and land gambling leviathan.

Experts at Citigroup have concluded that it may be too big a bite for Ladbrokes Coral, which only completed a merger recently to form a group valued at around GBP 2.5 billion (US$ 3 billion).

Speculating that a takeover premium of at least 30 percent would apply, the merger would cost nearly US$3.7 billion, more than Ladbrokes-Coral’s market value, they estimate.

They added that the “difficult operating environment in the U.K,” was also a factor to be taken into account, noting that gaming companies face increased taxation in a market that is highly competitive.

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