Irish billionaire Dermot Desmond launches attack on proposed £2bn merger between Ladbrokes and Coral days before crucial vote

Irish billionaire Dermot Desmond launches attack on proposed £2bn merger between Ladbrokes and Coral days before crucial vote


Attack: Irish billionaire Dermot Desmond

Attack: Irish billionaire Dermot Desmond

Irish billionaire Dermot Desmond launched a stinging attack on the proposed £2bn merger between rival bookies Ladbrokes and Coral just days before a crucial vote.

The financier – described as Ireland’s answer to Warren Buffett – urged fellow investors to vote down the tie-up which he described as the ‘wrong deal’.

Desmond, who owns a 1 per cent stake in Ladbrokes, made his comments in a public letter having thought to have exhausted private attempts to get Ladbrokes to ‘properly evaluate’ all strategic options.

Ladbrokes has struggled to compete with rivals who have been more advanced in launching games online.

Desmond criticised both Ladbrokes chairman Peter Erskine, who is due to step down, and his replacement, former Gala chief executive John Kelly, for bringing about ‘the death of Ladbrokes as an independent company’.

He recommended investors vote against the merger at a special meeting which has been convened next week to wave through the deal.

It is thought Desmond has been in contact with fellow shareholders and some are said to have shown strong interest in the points he has raised. In the letter, the billionaire aimed his guns at Kelly, accusing him of a disastrous tenure at Coral, saying he had ‘taken on excessive debt’ causing the firm to be ‘restructured to the detriment of shareholders shortly after he left’. He said Ladbrokes (up 0.2p at 109.5p) needs a fresh management team and suggested the merger appears to be a way for Gala Coral to get its hands on Ladbrokes on the cheap.

Former HBOS chief Andy Hornby likely to retain backing of... Pictures from Watford town centre. William Hill on the High Street.
For Money Mail
Picture by Damien McFadden: 07968 308252

. REXMAILPIX. William Hill shares slide as it becomes latest UK PLC to... Online gaming firm switches horses to GVC from... Share this article Share

The deal will see disgraced HBOS banker Andy Hornby, who is chief operating officer at Gala Coral, catapulted back into a senior role at a public firm.

Desmond said: ‘Giving away half your company and taking over £800m of debt is a very expensive way to recruit a quality management team.’

Ladbrokes said: ‘We note his views. The rationale and terms of the merger are in the circular and we remain confident that shareholders see the attraction of the proposed deal and continue to work towards a successful conclusion to the deal.’

Допълнителна информация