Ladbrokes Coral shares tumble as takeover talks with GVC end

Ladbrokes Coral shares rose steadily on Friday on speculation that a £3.2bn tie-up with GVC was on the cards. The Financial Times reported after the market closed that the talks had ended, however, and Ladbrokes Coral’s stock promptly fell.

The news follows a wave of consolidation in the gambling sector in the past year, as companies battle tighter regulation and increased taxes. Competitors Betfair and Paddy Power merged in February, while GVC, owner of Sportingbet, bought Bwin last year after outbidding rival 888 Holdings. William Hill has had potential deals with 888, Rank Group and Amaya fall through in recent months.

“Consolidation is front and center of everything in the gambling sector right now, and even early-stage talks are taken seriously by the market,” said David Jennings, an analyst at Davy Research. “What we saw today with Ladbrokes was the unwinding of expectations on Friday. With so much focus on incoming legislation, scale is important.”

He added that Ladbrokes would probably complete its merger with Coral before contemplating any further moves. “They’ll do five months of heavy lifting to integrate, and then, after the regulatory review next year [at the end of March], you can start making a case for them becoming more active,” he said.

UK ministers are considering tough new rules for gambling companies, which could face several new curbs, from a ban on daytime TV advertising to reduced stakes on betting machines.