Boylesports challenges Ladbrokes restructuring
Bookmaker launched bid for troubled rival last month
Boylesports signalled early in the examinership process that it was interested in bidding for the entire Ladbrokes chain in the Republic
Ladbrokes Ireland is working its way through a rescue plan for the loss-making chain with a High Court-appointed examiner, Ken Fennell of Deloitte. It plans to close up to 60 of its 196 betting shops in the Republic and cut some 250 jobs.
Boylesports intends to launch a bid for the entire company. It says this will involve an eight-figure investment and result in fewer shop closures, the preservation of more jobs and a better deal for creditors, including landlords who face the loss of rent on their properties.
On Tuesday the High Court gave Boylesports permission to submit motions challenging the examinership and to serve notice of its intentions to Ladbrokes Ireland, Mr Fennell and their legal teams. The matter is due back in court today.
Boylesports signalled early in the examinership process that it was interested in bidding for the entire Ladbrokes chain in the Republic. Mr Fennell invited it to submit an initial expression of interest; it was due to make a final offer later this week.
However, Boylesports says it has not been given sufficient access to the information it needs from Ladbrokes Ireland to formulate an offer. At the same time, it points out that one of the competing bids is the chain’s UK parent.
On that basis, Boylesports maintains that the objective of examinership is to ensure the company remains under the ownership of Ladbrokes plc.
A third potential buyer is also said to have contacted Mr Fennell. The identity and whether it is preparing a final bid for Ladbrokes Ireland has yet to be confirmed.
Save 600 jobsThe Ladbrokes Ireland examinership will result in the closure of about one-third of its betting shops. However, the company maintains that it will save 600 jobs from its 840- strong workforce, all of whom could face being laid off if it were to go into liquidation or receivership.
However, Boylesports says that its investment would save a larger number of jobs and would not require the closure of 50 to 60 betting shops.
It says its investment would result in a preferential creditors receiving all the money due to them and in a more generous settlement with unsecured creditors. It would also spend money directly on the betting shop business.
Boylesports itself is a creditor of Ladbrokes Ireland.
It also took over 15 betting offices vacated by British company William Hill, which left the Irish market, and has returned those outlets to profit.
Takeover reviewGiven the scale of the two businesses, a takeover of Ladbrokes Ireland by Boylesports would have to be reviewed by the Competition and Consumer Protection Commission, and could potentially result in the buyer forced to sell some outlets.
Separately, a number of landlords are still refusing to accept settlement terms that they have been offered to allow Ladbrokes Ireland to walk away from its leases.
The company wrote to landlords in May outlining what it believed would be appropriate compensation for breaking its leases. The letters also said these sums would be treated as unsecured debts by the examiner, and could thus be written down in any rescue plan. About 10 landlords are refusing to accept those offers.
Ladbrokes Ireland lost €5 million last year and saw revenues shrink by 1 per cent. The company is part of the UK-based multinational Ladbrokes plc. The company did not comment on Boylesports’s legal challenge.
Boylesports has 208 shops and employs 1,700 people in its retail and online operations.