Printer Friendly

Coral finally sold in pounds 390m deal.

THE future of Coral as a third major betting-shop force in Britain was yesterday secured when Ladbrokes sold the bookmaking chain for pounds 390m.

The deal-which effectively safeguards the name of Britain's third-largest bookmakers on the nation's High Streets-brings to an end an almost year- long period of uncertainty after Ladbrokes initially completed a deal to buy Coral, which was then blocked by Trade and Industry secretary Peter Mandelson.

The news was hailed as "a joyous Christmas present for punters" by Channel 4 Racing presenter John McCririck, who was one of the most vociferous opponents of the proposed Ladbroke/Coral merger.

The new owner of Coral is a subsidiary of Deutsche Bank, which secured the chain through its venture capital arm Morgan Grenfell Private Equity. The latter immediately revealed plans to dispose of the 827 Coral shops within a three-to-

five-year timescale. "MGPE has been involved in many high-profile buyouts and we either float them on the Stock Exchange, in which the ownership goes into public hands, or else we sell them to trade buyers," said Jonathan Derry-Evans, the director who led the Coral transaction.

"In terms of Coral I think the exit route is very much flotation and this is what we would aim to do in three to five years."

He said the policy was "exactly" the same as that employed by William Hill owners Nomura, who are currently considering future options for its bookmaking chain.

Ladbrokes, who have made a pounds 40m profit since taking over the Coral chain on the final day of last year, managed to secure a pounds 27m higher purchase price than they originally paid for the business.

Chris Bell, managing director of Ladbroke Racing, said: "The final offer is a very solid price which gives a strong vote of confidence in the state of off-course betting."

But Ladbrokes' financial gain, which will be used to reduce group debt, was quickly highlighted by BHB chief executive Tristram Ricketts as a cue for increased contributions to a new Levy scheme. "It will further reinforce the BHB's determination to secure an increase in the percentage of betting turnover flowing to racing," he said.

Morgan Grenfell's purchase of Coral includes the company's 827 shops, its credit and telephone betting operations and the Romford and Hove greyhound tracks.

"Whilst we would have liked to have kept Coral, the excellent price that we have achieved underlines the long-term potential of the off-course industry, in which we remain the largest operator," said Peter George, chief executive of the Ladbroke group.

Rival bookmakers the Tote and Stanley Leisure were both linked to a Coral purchase before the field was narrowed down to two-Deutsche Bank, via Morgan Grenfell, and another equity firm, Cinven.

The Tote dropped out last Friday after making a final bid of pounds 375m. "I'm disappointed for the Tote, but the pounds 15m gap between the Tote's last offer and the final price was very large; it wasn't even a photo-finish," Bell said yesterday.

Tote chairman Peter Jones commented: "We are surprised that a venture capitalist could justify paying pounds 390m for Coral, but clearly their sums are different from ours."

Morgan Grenfell, whose previous buys include the British School of Motoring and Taunton Cider, said it would be "backing all the way" the existing staff at Coral.

Graham Hutton, chief executive of Morgan Grenfell Private Equity, said: "Coral operates in a progressive and innovative way, bringing a more consumer-friendly approach to this industry. We intend to continue to invest in the business and develop the franchise."

Coral will now be run by Bob Scott, 45, who has recently been operations director of Mecca and began his career in the betting industry with William Hill.

Derry Evans said Morgan Grenfell was keen to retain the existing management team at Coral of Vaughan Ashdown and Trevor Beaumont. "Bob Scott will be responsible for the day-to-day running of the business and everything we have heard about Vaughan Ashdown and Trevor Beaumont means they are very, very important to the future," he said.

What the deal involves

827 betting shops in the UK (832 in original deal, down by property movement in meantime)

Credit and phone-betting operation; fourth biggest in UK

Two greyhound tracks-Hove and Romford

Stakes in companies operating betting-shop numbers games Lucky Choice (with William Hill and Tote) and 49's (with William Hill)

lVarious properties; freehold and leasehold, including head office at Barking, Essex, employing 230

What it doesn't involve

50 betting shops in Ireland; Irish competition authority agreed there was no case to answer

8 betting shops in Jersey; does not come under jurisdiction of Monopolies & Mergers Commission

Five per cent stake in SIS; taken on by Ladbrokes under pre-emption rights of existing SIS shareholders when Bass sold Coral's 11.84 per cent holding; future under discussion with Office of Fair Trading
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1998 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Sports
Author:Griffiths, Richard
Publication:The Racing Post (London, England)
Date:Dec 23, 1998
Previous Article:Top owner Louis Freedman dies at 81.
Next Article:Pricewise: 8-1 Escartefigue is only value left; Flawed favourites make fascinating King George a poor race for punters, but Shahrur is outstanding at...

Related Articles
Greyhounds: Tracks sold in new deal.
The Coral Sale: Family firm that grew into a pounds 390m giant; HISTORY OF CORAL.
The Coral Sale: BHB warning to bookmakers; Ricketts says Ladbrokes' profits from the Coral sale clearly point to a rise in Levy payments.
The sale of William Hill: New owners finally seize their prey.
Coral could be put up for sale in week Hills prospectus is published.
How Kagarlitski's bets became big business.
Coral is sold to venture capitalist Charterhouse for pounds 860 million; Ashdown will fulfil lifetime ambition by taking over the reins.
Analysts' surprise at price paid for Coral; City insiders describe Charterhouse's pounds 860m offer as `excessively high'.
Coral: a brief history.

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters