Bookmaker Ladbroke to buy Coral in £375m deal

Ladbroke bookmakers will acquire the rival Coral group and the merged operation will dominate the Irish market, along with the Paddy Power Group. The £375.5 million sterling deal between the two British groups involves 891 betting shops changing hands, including 50 shops in the Republic. This will increase the number of Ladbroke outlets here from 73 to 123, subject to Competition Authority approval of the takeover.

But Paddy Power, an Irish company with 105 outlets, is still a nose ahead of Ladbroke in terms of its market share of the off-course industry, worth £435 million annually.

According to a spokesman for Paddy Power, its share of the industry in 1997 was 27.5 per cent, worth more than £119 million. "It does not alter Paddy Power's position as number one bookmaker in the country," he said.

Ladbroke stated yesterday that "the combined market share is estimated to be 25 per cent [£109 million]".

The two groups will dominate the Irish bookmaking industry, with a combined total of 228 outlets out of more than 700. The takeover has to be approved by the regulatory authorities in both countries.

Ladbroke, which already owns 1,925 shops, has also conditionally agreed to sell 128 of its British outlets for £41 million to Tote Bookmakers to maintain local market competition. Tote has a big on-course presence in Britain and Ireland.

Mr Mike O'Kane, Ladbroke operations director in Ireland, said he expected the effect of the takeover on Coral's estimated 200 Irish employees to be minimal, although the industry, particularly in Britain, has seen increasing rationalisation in recent years.

More than 600 betting shops closed over the past three years in Britain with the loss of more than 3,400 jobs. "If you look around Dublin, there are certainly plenty of shops around and new ones opening," Mr O'Kane said.

One independent bookmaker said the Irish betting industry suffered a setback with the launch of the Lotto 10 years ago, but had revived well with most major racecourses undergoing investment programmes.

Winning horses such as Doran's Pride, Imperial Call and Danoli commanded a huge following, he said. Bookmakers also take their cut from Lotto interest with their "Lucky Numbers" game, worth about £50 million annually to them.

Mr O'Kane added that, although the Irish business was different to its British counterpart, it was equally profitable "if you manage it properly".

In Britain, the deal leaves the new grouping with nearly twice as many outlets as its main rival, William Hill, whose 1,530 shops were bought recently by the Japanese bank, Nomura.

As part of the deal, the company has also acquired telephone betting and on-course betting facilities, the Romford and Hove greyhound racing tracks and Bass's interests in Satellite Information Services, "and other industryrelated joint ventures".

Coral made pre-tax profits of £33 million on turnover of £893 million in the year to September 30th, 1997. Ladbroke, which also operates in Europe and the Americas, had interim pre-tax profits of £56.9 million on turnover of £1.484 billion to the end of June, 1997.

Mr Mike Smith, the chief executive of the group's betting and gaming division, said that racing relied upon a successful betting industry for its funding and the deal would ensure that both industries remained strong into the next century.