Ladbrokes-Gala Coral deal clearance might depend on store sales

Bookmakers Ladbrokes and Gala Coral may need to shed hundreds of stores if their proposed merger is to proceed, the competitors watchdog has actually stated.

The Competition and Markets Authority stated a merger of the UK's 2nd and third biggest bookies might limit competition on the High Street.

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

The CMA has actually given up until 13 June for responses to its provisionary findings.

Ladbrokes operates 2,154 wagering shops in Great Britain and 77 in Northern Ireland, while Gala Coral runs about 1,850 wagering 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 inquiry, said: "We've provisionally found that the merger in between 2 of the biggest bookies in the nation might be expected to reduce competition and choice for clients in a big number of cities.

"Although online wagering has grown substantially in the last few years, the proof we have actually seen validates that a a great deal of customers still select to wager in shops - and numerous would continue to do so after the merger.

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

The CMA stated it was intending to publish its final report by the end of July.

Ladbrokes said: "this promotion code is a considerable step and our focus now will be on concurring the store disposals to satisfy the CMA." Ladbrokes shares had actually jumped 6.5% by the close of trade on Friday.

Gala Coral stated it noted that the CMA was "provisionally minded to clear the proposed merger" which it would continue to deal with the regulator on ways to accomplish last clearance.

Analysis: Frank Keogh, BBC Sport racing reporter:

The face of Britain's betting stores has transformed in the last 20 years - from smoky boltholes with horse racing dominating proceedings to shiny multi-screen sport outlets where fixed-odds betting terminals are a huge earner.

While critics say the casino-style devices have motivated problem gamblers, the bookies firmly insist staff are trained to keep an eye out for issues.

The bottom line is the rise of the machines has helped keep a number 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 promotion code proposed ₤ 2.3 bn merger reveals there is lots of money still to be made in the British betting market.

Analysts state the merged company will still have a dominant position even if many stores need to be offered.

"We expect considerable cost saving will be possible since there will be vast locations of overlap and unneeded duplication of functions across the combined service," stated Steve Clayton, head of equity research study at Hargreaves Lansdown.

Ladbrokes concurred the regards to a ₤ 2.3 bn all-share merger with Coral in July, and the company's investors backed the handle November.

Ladbrokes earnings struck by writedowns

11 August 2015