LADBROKES PLC

Divestment of certain licensed betting offices

Ladbrokesplc ('Ladbrokes') is pleased to announce that subsidiaries of Ladbrokes and Gala Coral Group Limited (together the 'Vendors') have agreed to sell a total of 359 licensed betting offices ('shops') to Done Brothers (Cash Betting) Limited (trading as 'Betfred') and StanJames (Abingdon) Limited (trading as 'Stan James') (the 'Purchasers'). Betfred will purchase 322 shops for a cash consideration of £55.0m and Stan James will purchase 37 shops for a cash consideration of £0.5m. The exchange of contracts is conditional upon:

· The approval of the Competition and Markets Authority ('CMA'); and;

· The completion of the merger of Ladbrokes plc and the Coral Group (the 'Merger').

The combined consideration of £55.5m for the sale of the 359 shops is payable to each of the Vendors in proportion to the profitability of the shops. It is intended that the consideration received will be used to repay debt.

The shops generated fully costed EBITDA (including an estimated allocation of retail back office costs) of £16.8m in the year to 31 December 2015, resulting in an EBITDA consideration multiple of 3.3x. The disposal will be slightly dilutive to both Ladbrokes and the enlarged group's earnings.

Summary:

Ladbrokes

Coral

Total

Shops

185

174

359

Expected Consideration

£29.0m

£26.5m

£55.5m

Fully costed EBITDA

£8.2m

£8.6m

£16.8m

Shop EBITDA

£12.8m

£13.0m

£25.8m

On 26 July 2016, the CMA published its final conclusions into the Merger in which it stated that the Merger could proceed subject to the divestment of 350 to 400 shops, and that completion of the Merger could occur when the shop divestment process was substantially complete.

The CMA will now decide if it will approve the Merger upon the exchange of contracts, subject to the CMA's approval, for the sale of 322 shops to Betfred and 37 shops to Stan James. Once approval has been received, the parties will seek the CMA's consent to complete the Merger subject to the divestiture of one remaining shop.

Following receipt of this approval, Ladbrokes will publish a prospectus in relation to the readmission of the enlarged group to the premium listing segment of the Financial Conduct Authority's Official List and to trading on the London Stock Exchange. It is expected that completion of the Merger will take place in the near future.

Commenting on the sale Jim Mullen, Chief Executive of Ladbrokes said:

'The sale of these shops will clear the last significant hurdle to delivering on the merger with Coral and paves the way for our focus on completion and quickly delivering on the opportunities the merger offers.'

Enquiries

Investors:

Snehal Shah, Group Financial Controller and Head of Investor Relations

Press:

Donal McCabe, Group Communications Director

Switchboard +44 (0) 20 8868 8899

Notes:

The allocation of consideration between the Vendors is determined by comparative profitability in the 12 months to 30 June 2016.

Year to 31 December 2015. Fully costed EBITDA reflects shop profit after the allocation of retail back office costs but before depreciation and amortisation.

Year to 31 December 2015. Shop EBITDA reflects shop profit before allocation of retail back office costs and depreciation and amortisation, and therefore represents the reduction in profit of the enlarged group as a result of the sale of these shops.

Ladbrokes plc published this content on 17 October 2016 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 17 October 2016 06:13:04 UTC.

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