Poll: Are Dermot Desmond's Ladbrokes merger concerns valid?

Dermot Desmond hit the headlines last week when the Ladbrokes shareholder launched a scathing attack on the operator’s proposed merger with Gala Coral.

The Irish financier, who is thought to own between 2% and 3% of Ladbrokes, published a 58-slide presentation titled ‘Say No to Coral’ in which he criticised the firm’s board and management for “abdicating turnaround responsibility” of the Ladbrokes business.

In urging shareholders to reject the deal when it goes to a vote this week, Desmond said the merger undervalued Ladbrokes’ potential, would significantly increase debt and retail exposure and was heavily stacked in favour of Gala Coral’s private equity owners.

“The proposed transaction delivers control of Ladbrokes to Coral’s private equity owners, providing them with a valuable route to liquidity for their shares and significant relief from their debt burden,” Desmond argued.

The millionaire also described the £75m services settlement paid to Playtech as part of the merger deal as a “very substantial and unexplained incentive payment” despite, he said, the supplier having failed to rejuvenate Ladbrokes’ digital business as per the 2013 agreement.

Ladbrokes last week brushed-off Desmond’s intervention, with a spokesperson telling eGaming Review the firm had long been aware of the shareholder’s concerns but remained confident the merger was an “attractive” proposition.

And at the weekend, Ladbrokes’ third biggest shareholder Richard Buxton, chief executive of Old Mutual Global Investors, told The Daily Telegraph that Desmond’s objections were “wishy-washy” and that he was fully supportive of the combination.

With this in mind, this week’s eGR poll wants to know whether you feel Desmond raised some valid points or whether the arguments behind his intervention were unsubstantiated. Have you say on the right-hand side of the page.