6th Mar 2018 06:59
LONDON (Alliance News) - Moody's Investors Service on Tuesday assigned gaming operator GVC Holdings PLC a Ba2 corporate family rating, along with its senior secured facilities, with a stable outlook.
The agency assigned the rating based on its GVC's agreed acquisition of Ladbrokes Coral PLC, which, though still subject to shareholder and regulatory approval, will enlarge the group into one of the world's largest gaming operators with EUR3.6 billion of pro-forma revenue for the 12 months that ended June 30.
Moody's also cited the merger's geographic potential, with a presence in 35 countries, although the UK will remain its biggest market, making up 70% of combined revenue, with Germany second, accounting for 6.0% of revenue from its current 28% contribution to GVC as exposure to regulated and taxed jurisdictions increases.
Finally, Moody's pointed towards positive industry trends in the market in Europe, as well as the balancing of increased exposure to the more mature retail gaming sector in the UK, Italy, Belgium, Ireland and Spain, and potential merger synergies expected at GBP100.0 million per annum four years after deal completion.
However, the agency did mention that its rating was constrained by a highly competitive online betting and gaming market, particularly in the UK, hampered even further by the threat or greater regulation and higher gaming taxes, especially with the pending outcome of the Triennial Review on fixed-odds betting terminals.
The UK Competition & Markets Authority is currently reviewing the GBP3.20 billion merger of Ladbrokes Coral and GVC Holdings, and expects to make a decision on April 6. If the deal is approved, it is forecast to be completed within the first half of 2018.
Related Shares:
Ladbrokes CoralGVC.L
