GVC Officially Offloads Headlong Limited Ahead of Ladbrokes Coral Bid

 GVC takeover.

GVC disposes of Turkish asset to make way for its £3.9 billion takeover of Ladbrokes Coral. (Image: research-tree.com)

GVC Holdings has completed the sale of its Turkish asset, Headlong Limited, ahead of its potential takeover of Ladbrokes Coral.

After announcing the sale of Headlong in November, GVC has moved quickly to fully dispose of the subsidiary in an effort to bolster its £3.9 billion bid for Ladbrokes Coral.

“Further to the announcement made on 2 November 2017, the Board of GVC is pleased to advise that following receipt of the required regulatory approvals, the sale of Headlong Limited and other companies to Ropso Malta Limited has now been completed,” read GVC’s December 20 completion notice.

Grey Market Exit Paves Way for Deal

Over the last two years, GVC has made three previous attempts to purchase Ladbrokes Coral. On all three occasions, talks have broken down due to a number of issues, one of which was GVC’s interests in unregulated markets.

Although official figures are fleeting, analysts at Citi have estimated that GVC derives between 25 and 30 percent of its business from markets without formal regulation.

For Ladbrokes Coral, which conducts the bulk of its business in regulated, this presence in unregulated markets has stalled talks.

However, with the sale of Headlong now complete, GVC has successfully reduced its reliance on grey markets and, in the process, made itself a more viable partner. Moreover, the company has added another £134 million to its takeover fund.

FOBT Review to Force More Industry Changes

While GVC and Ladbrokes Coral could be set to join forces in the coming months, other industry operators are awaiting the outcome of the government’s betting machine review. A 12-week consultation to decide the fate of fixed odds betting terminals (FOBTs) got underway on October 30.

At the heart of the review is the issue of lowering the maximum stakes and what the new pricing structure should be. Calls for the limit to be set at £2 have caused consternation among operators who now derive a large portion of their revenue from the machines.

If and when now regulations are brought in, it’s likely to affect high street bookmakers and potentially force more consolidation and coalitions. For now, however, GVC is looking to capitalise on its market position and complete a deal that would see it become one of the largest gaming companies in the world.

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