Takeover Appeal Board decision on Ladbrokes Plc

Takeover Appeal Board decision on Ladbrokes Plc

This news analysis considers the recent decision of the Takeover Appeal Board (Board) to dismiss three appeals which arose in connection with the proposed merger of Ladbrokes plc (Ladbrokes) with the Gala Coral Group and what the decision means for corporate lawyers.

Original news

Takeover Appeal Board statement on Ladbrokes/Gala Coral merger,  LNB News 15/06/2016 125

A Board statement has been issued in relation to the proposed merger of Ladbrokes and Gala Coral Group Ltd. The Board has dismissed three appeals made by a Ladbrokes shareholder who was concerned about, among other things, non-compliance with the requirement to publish material contracts on a website as required by Rule 26.3(d) of the City Code on Takeovers and Mergers (Code) and perceived omissions and inaccuracies in the circular issued in relation to the transaction on 30 October 2015.

What was the decision of the Board?

The Board's decision is the latest development in connection with concerns of non-compliance with the Code regarding the proposed merger between Ladbrokes and the Coral Group (Coral) raised by Mr Desmond, a Ladbrokes shareholder. Mr Desmond was concerned about arrangements entered into between Ladbrokes and one of its suppliers.

Concerns raised by the shareholder included:

  • that Ladbrokes had failed to publish on a website certain material contracts it had entered into within two years of the beginning of the offer period in accordance with rule 26.3(d) of the Code
  • that the circular to shareholders in relation to the proposed merger contained material omission and inaccuracies, which rendered it misleading, so that Ladbrokes shareholders voted at the general meeting (passing various resolutions in connection with the proposed merger) on a false premise
  • that the material contracts constituted inducement an inducement to deal, for the purposes of note 11(a) on the definition of 'acting in concert' referred to in the Code, r 26.2(c), and
  • that the circular may contravene certain of the UK Listing Authority's (UKLA) Listing Rules, and Disclosure Rules and Transparency Rules

The Board has dismissed all appeals made by Mr Desmond, upholding

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About the author:
Kavita trained at Simons, Muirhead & Burton and qualified in 2006 in their Corporate department where she acted on private M&A transactions. Before joining LexisNexis as a Corporate PSL, she worked (as a fee-earning solicitor) in the Corporate team at King & Wood Mallesons (legacy Mallesons Stephen Jaques) for a number of years where she advised and acted on a broad range of corporate matters, including private M&A, private equity transactions, regulatory and general corporate matters.