Thin hedge

7 December 2017 By Liam Proud Follow @liamwardproud

The Foxy Bingo owner is offering up to 3.9 bln pounds for the UK bookie. That’s despite a government review that may hurt Ladbrokes’ gaming-machine business. Moving quickly makes sense for GVC, and natty financial structuring will improve its odds. The bet could still backfire.

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British gaming group GVC on Dec. 7 said it was in detailed discussions with Ladbrokes Coral Group over a possible acquisition that would value the sports-betting company’s equity at up to 3.9 billion pounds.

The owner of Sportingbet and Foxy Bingo would offer Ladbrokes investors 32.7 pence per share in cash, 0.141 new GVC shares and a contingent value right linked to the outcome of a government review of fixed-odds betting stakes.

British Minister for Sport and Civil Society Tracey Crouch said in October that a consultation on rules governing the popular gaming machines would last until Jan. 23 2018.

The minimum value of GVC’s bid values Ladbrokes’ equity at 3.1 billion pounds, or 161 pence per share, based on GVC’s closing share price on Dec. 6. The maximum value is 3.9 billion pounds, or 204 pence per share. Ladbrokes shares rose 25.5 percent to 170 pence at 0858 GMT.

GVC shares were up 5.8 percent to 962 pence.

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