Dermot Desmond vows to keep fighting against Ladbrokes merger
Billionaire financier Dermot Desmond has vowed to keep fighting Ladbrokes' proposed merger with Gala Coral after shareholders voted overwhelmingly to back the deal.
More than 96% of votes at a shareholder meeting were in favour of the merger, which Mr Desmond - himself an investor in Ladbrokes - has vocally opposed.
"This is only the first round of 15 rounds, or 10 rounds or seven rounds," Mr Desmond said after the meeting. "There's a long way to go." He said one option would be to convene another shareholders meeting, for which he would need the support of the holders of 5% of the shares.
Earlier Mr Desmond lambasted the bookmaker's board and management as "not good enough" and said the company's performance over the last five years has been abysmal.
He said the merger "could be a deal too far for Ladbrokes shareholders".
"The company's total debt burden will increase by four times to £1.2bn.
"Given the increased exposure to a declining and increasingly regulated retail sector, Ladbrokes will encounter significant and growing challenges in servicing these levels of debt," Mr Desmond said. He said the company's total profit before tax had fallen by 40% in the last five years.
The deal will need to be assessed by the Competition and Markets Authority (CMA). Mr Desmond, who is also a shareholder in Belfast Telegraph parent company INM, said that would involve "a negotiated settlement between Ladbrokes and the authority that could see the mandatory disposal of a material amount of the retail estate - estimated by analysts at between 400 and 1,000 shops and up to as much as £70m in lost EBITDA. In truth, the scale and cost of these disposals is totally unknown.
"I recognised from the outset that the board would likely already have sufficient proxies to carry the vote at today's meeting.
"However, it is clear to me from my discussions with the major shareholders that there is strong support for the requirement for the board to return to the shareholders once the CMA negotiations are finalised," he said.