LONDON (Alliance News) - The UK's Takeover Panel said on Monday that a hearing will take place on Thursday after Irish businessman Richard Desmond, a shareholder in Ladbrokes PLC who has criticised the bookmaker's GBP2.3 billion merger with rival Gala Coral, requested a review of a decision made by the panel's executive arm in regards to the deal.
Desmond, who owns less than 3.0% of Ladbrokes, has said the merger is "the wrong deal" and called on other shareholders to reject it at a vote to be held on Tuesday. Last Thursday Ladbrokes reiterated its recommendation that shareholders vote in favour of the proposed merger.
"Under the terms of the merger, Ladbrokes has agreed to acquire certain businesses from Gala Coral in exchange for new shares in Ladbrokes representing approximately 48.25% of the enlarged issued share capital of Ladbrokes at the time of the announcement of the merger," the Takeover Panel said.
"The Panel Executive has agreed in principle to grant a waiver of the obligation to make a mandatory offer which would otherwise arise under Rule 9.1 of the takeover code as a result of the issue of the consideration shares to Gala Coral as part of the merger, subject to compliance with the requirements of Note 1 of the Notes on Dispensations from Rule 9 (a 'whitewash')," it added.
However, the statement said that the Panel Executive received a complaint from Desmond on Monday last week, in which it was alleged that "certain contracts which are summarised in the circular are material contracts entered into in connection with the merger and that such contracts should therefore have been published on a website by Ladbrokes" in accordance with takeover rules.
Four days later the Panel Executive ruled that those contracts "were not material contracts entered into in connection with the merger which are required to be published on a website by Ladbrokes" under takeover rules.
According to the Takeover Panel, Desmond has requested that this ruling be reviewed by the Hearings Committee of the panel.
"Ladbrokes and Gala Coral have agreed with the Executive that, if (i) the ruling is successfully reviewed and (ii) it is determined as part of that successful review that the failure to publish the relevant contracts on a website was sufficiently material that a further general meeting of Ladbrokes should be convened in respect of the whitewash, they will accept that decision and Ladbrokes will convene such a general meeting.
Ladbrokes, Gala Coral and Desmond all agreed to the release of the Takeover Panel's announcement, the statement said.
Shares in Ladbrokes closed up 0.3% at 109.90 pence on Monday.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
Copyright 2015 Alliance News Limited. All Rights Reserved.
