GVC avoids £700m payment for Ladbrokes takeover
By Caoimhe Toman
Date: Thursday 15 Nov 2018
(Sharecast News) - GVC Holdings avoided paying almost an extra £700m for its acquisition of Ladbrokes after the government issued a new ruling on the UK fixed-odds betting machines.
In a major U-turn on Wednesday the government announced that the maximum amount that punters can stake on fixed-odds betting machines will be limited from next April, instead of October as had been planned.
The culture secretary, Jeremy Wright, issued a written statement on Wednesday afternoon confirming that the stake reduction included B2 gaming machine stakes limited to a stake of £2, down from £100.
GVC would have been liable for a payment of about £670m to former Ladbrokes shareholders if legislation aimed at tackling problem gambling had not been introduced before the end of March next year, analysts said.
GVC issued securities known as Contingent Value Rights (CVRs) as part of their takeover of Ladbrokes in March 2018. The CVR required GVC to pay former Ladbrokes shareholders if a cap on the maximum stake on fixed-odds betting terminals (FOBT) - gambling machines considered highly addictive - was not implemented by March 28, 2019.
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