REG - Ladbrokes Coral Grp GVC Holdings PLC - Offer by GVC Holdings PLC <Origin Href="QuoteRef">GVC.L</Origin> <Origin Href="QuoteRef">LCL.L</Origin> - Part 2

EntainAnnouncement

22/12/2017 07:05

- Part 2: For the preceding part double click  ID:nRSV1823Aa 

efficiencies through
improved customer acquisition and retention. Ladbrokes Coral's significant
retail presence and multi-channel know-how can assist GVC in driving further
online growth in both GVC and Ladbrokes Coral brands. 
 
The Enlarged Group will have customers from over 35 countries providing a base
for further international expansion by utilising the combined scale and
complementary strengths of GVC and Ladbrokes. As it expands into new
international markets (including new markets that may regulate sports-betting
in future), GVC believes that the scale and diversity of the Enlarged Group's
portfolio of brands, including Ladbrokes Coral's retail presence, will deliver
improved buying power across key marketing channels. 
 
Highly regarded and complementary senior management and personnel 
 
GVC has a strong track record in selecting talented people from acquired
businesses (as demonstrated in GVC's acquisitions of bwin.party and
Sportingbet).The acquisition of Ladbrokes Coral will further deepen and
broaden the talent pool at GVC, presenting the Enlarged Group with one of the
most experienced teams in the industry. In addition to exploiting the full
potential of the existing operations, the breadth of experience across the
Enlarged Group's personnel base should also open up new opportunities in terms
of markets and non-organic growth. 
 
Market-leading proprietary technology 
 
GVC believes that ownership of its market-leading technology and products will
enable the Enlarged Group to be proactive and adapt quickly to differentiate
itself in a highly competitive market. Applying GVC's proprietary platform
across a multi-product multi-brand platform will eliminate duplication of
technology and create operational efficiency, while reducing the cost of
third-party service and content provision. 
 
When combined with scale, an efficient proprietary technology platform
presents significant operational advantage. It also allows the Enlarged Group
to offer a superior customer experience by creating new products and brands
across online, retail and mobile on the same platform, and enhancing the
opportunities for cross-selling between brands and verticals. 
 
Taking the initiative now 
 
The Acquisition allows GVC and Ladbrokes Coral shareholders to benefit from
the business combination in the near term, with a flexible consideration
structure which takes into account a range of outcomes under the Triennial
Review and at a time when financing conditions are favourable. The Board of
GVC also believes that the Acquisition will be double digit EPS accretive from
the first full year post-Completion and following all reasonably expected
outcomes of the Triennial Review, including the FOBT maximum stake being set
at £2.00.The Board of GVC also believes that the Enlarged Group's leverage
will not exceed 3.0x Net Debt/EBITDA (where Net Debt is interest bearing loans
and borrowings and customer liabilities less cash and cash equivalents and
EBITDA is Clean EBITDA) by the end of the first full financial year
post-Completion, following all reasonably expected outcomes of the Triennial
Review. 
 
Synergies from the Acquisition 
 
Following analysis undertaken by GVC and discussions with Ladbrokes Coral, the
Directors of GVC have identified significant opportunities for cost and
revenue synergies as a result of the Acquisition which are expected to create
shareholder value. 
 
The Board of GVC believes that the Enlarged Group will be able to achieve
recurring annual pre-tax cost synergies of not less than £100 million. GVC
expects that these cost synergies are split between and would be realised
principally from: 
 
(a)        Technology and data enabled efficiencies, accounting for
approximately 44 per cent. of the identified cost synergies: 
 
·      consolidating the Enlarged Group's sportsbetting and gaming operations
and other business operations onto common platforms, where possible; 
 
·      deploying and promoting the Enlarged Group's own gaming content rather
than that of a third party, where possible; and 
 
·      using the increased bargaining power of the Enlarged Group to negotiate
better contracted rates with common suppliers for data content and streaming. 
 
(b)        Corporate and administrative efficiencies, accounting for
approximately 30 per cent. of the identified cost synergies: 
 
·      consolidating the trading and customer service teams to service all
brands across the Enlarged Group and consolidating technology costs to the GVC
technology platform; 
 
·      utilising technology and lower cost locations to drive greater staff
productivity; and 
 
·      moving common operational marketing and central functions to a central
service group. 
 
(c)        Marketing efficiencies, accounting for approximately 14 per cent.
of the identified cost synergies: 
 
·      applying Ladbrokes Coral's business intelligence to GVC brands to
achieve savings from reduced marketing and bonus spend. 
 
(d)        Other efficiencies, accounting for approximately 12 per cent. of
the identified cost synergies: 
 
·      consolidating some international businesses  by combining platforms and
harmonising teams; 
 
·      reducing external costs including payment processing and professional
services fees; and 
 
·      reducing other expenditure such as office and travel costs. 
 
The Board of GVC expects that synergy and saving realisation of £100 million
will take place progressively, whereby approximately £7 million of the total
cost synergies will be achieved in the first calendar year following
Completion, rising to approximately £33 million by year two and approximately
£56 million by year three following Completion. It is expected that a benefit
of £100 million of identified cost synergies will be achieved by 2021. The
synergies programme is expected to continue after 2021, but the scale of
further synergies has not been fully quantified, and so are not being reported
on for the purposes of the Takeover Code. The expected synergies will accrue
as a direct result of the Acquisition and would not be achieved on a
standalone basis. 
 
The Acquisition is also expected to generate annual capital expenditure
savings arising from technology and procurement synergies in the Enlarged
Group. These have not been quantified, and so are not being reported on for
the purposes of the Takeover Code. 
 
In addition to the quantified cost synergies, the Board of GVC also believes
that the Acquisition will generate revenue synergies through the actions
outlined below: 
 
·      cross-selling leading products between customer bases; 
 
·      leveraging brands and driving incremental revenues for the Enlarged
Group by implementing best in class client relationship management and back
office systems; 
 
·      applying sophisticated marketing techniques to an expanded customer
base across a broader product offering; and 
 
·      differentiating the Enlarged Group's offering more effectively in
competitive markets. 
 
The financial effects of the revenue synergies outlined above have not been
quantified, and so are not being reported on for the purposes of the Takeover
Code. 
 
Non-recurring restructuring costs of at least £100 million are expected to be
incurred in delivering the identified cost synergies in the four years post
completion.The phasing of these costs will be £17 million in the financial
year ending 31 December 2018, £30 million in 2019, £31 million in 2020 and £22
million in 2021. No recurring restructuring costs have been identified as a
consequence of the Acquisition. 
 
Other than these identified restructuring costs and the waiver by GVC of its
rights to earn-out consideration following the sale of its Turkish facing
business which was payable over a five-year period up to a maximum of E150m
(summarised in paragraph 8 below), the Board of GVC does not expect any
dis-synergies to arise as a result of the Acquisition. 
 
The statements above of estimated cost synergies relate to future actions and
circumstances which inherently involve risks, uncertainties and contingencies.
Accordingly, the cost synergies referred to may not be achieved, may not be
achieved within the time periods specified or may be achieved in a different
form to that which is currently envisaged by the Board of GVC. For the
purposes of Rule 28 of the Code, the statements above of estimated cost
synergies are the responsibility of the Directors of GVC, in their capacity as
directors of the offeror under the terms of the Acquisition. Appendix IV Part
A contains the statement made by the GVC Directors on the anticipated
quantified financial benefits of the Acquisition together with the relevant
bases of belief (including sources of information and principal assumption)
supporting the statement and their analysis and explanation of the underlying
constituent elements, and Parts B and C respectively contain the related
reports from GVC's reporting accountants, Grant Thornton, and financial
adviser, Houlihan Lokey. The quantified financial benefit statement is not
intended as a profit forecast and should not be interpreted as such. 
 
4          Terms of the CVRs and Loan Notes 
 
General 
 
Under the terms of the Acquisition, for each Ladbrokes Coral Share that they
hold, Ladbrokes Coral Shareholders will be entitled to receive (in addition to
the cash and GVC Shares offered) a contingent entitlement of up to 42.8 pence
in principal value of Loan Note plus an upward adjustment for the time value
of money by way of a contingent value right ("CVR"). 
 
The CVRs have been constituted by a deed poll entered into by GVC on the date
of this Announcement ("CVR Instrument").Under the terms of the CVR Instrument,
the principal value of each Loan Note that the CVR Holder is entitled to
("Loan Note Principal Value"), and therefore the amount of cash ultimately
payable to a Loan Note holder upon redemption of their Loan Notes, will be (i)
if Triennial Measures are Enacted, determined by means of an assessment
process set out in the CVR Instrument and summarised below or (ii) if no
Maximum Stakes Measures are Enacted by the first anniversary of the Effective
Date, 35 pence for each CVR held by such CVR Holder. The assessment process
referred to in (i) will evaluate the potential impact (if any) of certain
measures arising from the Triennial Review on the profitability of the
Ladbrokes Coral UK Business taking into account the estimated effect of any
mitigating circumstances in the UK businesses carried on by the Wider
Ladbrokes Coral Group. The Loan Note Principal Value is capped at a maximum of
42.8 pence plus an upward adjustment for the time value of money. If the
results of the assessment process are such that the Loan Note Principal Value
is agreed or determined to be zero, no Loan Notes will be issued, and in these
circumstances the Ladbrokes Coral Shareholders will not receive any additional
consideration under the terms of the CVR Instrument. In these circumstances,
the value of each CVR would be zero. There will be no interest conferred by a
CVR on the economic activities of Ladbrokes Coral, GVC or the Enlarged Group
generally. 
 
The Takeover Panel has determined that an estimate of the value of a CVR in
accordance with Rule 24.11 of the Code is not required to be included in the
Scheme Document. 
 
Ladbrokes Coral Shareholders should obtain their own independent professional
tax advice in relation to the acquisition, holding, transfer and disposal of
CVRs and/or Loan Notes in the light of their own particular circumstances. 
 
Houlihan Lokey has not been required to confirm, and nor has it confirmed,
that resources are available to GVC to satisfy payments under the Loan Notes
and Ladbrokes Coral Shareholders will be at risk if, for any reason, GVC is
not in a position to meet its obligations under the CVR Instrument and/or the
Loan Note Instrument. 
 
Triennial Measures 
 
Any of the following changes to law or regulation arising out of the Triennial
Review (together, the "Triennial Measures") will be taken into account in
assessing the Loan Note Principal Value: 
 
·              any changes to the maximum stake which may be wagered by a
player on any particular game cycle on a FOBT which are Enacted ("Maximum
Stakes Measures"); 
 
·              any Enacted or likely changes to the maximum number of FOBTs
legally permitted per LBO ("Maximum Machines Measures"); and 
 
·              any Enacted or likely changes to the minimum time period for
completion of an individual game cycle on a FOBT (commonly known as "spin
speed") ("Spin Speeds Measures"). 
 
Any other measures arising out of the Triennial Review and relating to the
regulation of FOBTs will not be taken into account in the assessment of the
Loan Note Principal Value. 
 
Assessment process 
 
The assessment process for the purposes of determining the Loan Note Principal
Value will commence 10 Business Days after the Enactment of the Maximum Stakes
Measures (the "Review Commencement Date"). If no Maximum Stakes Measures have
been Enacted by the first anniversary of the Effective Date, then each CVR
Holder shall have the right to receive a Loan Note with a principal value of
35 pence for each CVR held by such CVR Holder. 
 
The CVR Instrument provides that the following parties (together, the
"Consulting Parties") are involved in the assessment of the Loan Note
Principal Value: 
 
·              a representative of GVC (the "GVC Representative"); 
 
·              an individual appointed to represent the CVR Holders (the "CVR
Representative); and 
 
·              if the GVC Representative and the CVR Representative are unable
to agree the Loan Note Principal Value, an expert, jointly appointed by GVC
and Ladbrokes Coral (the "Expert"), who will be Deloitte LLP. 
 
The methodologies to be used by the Consulting Parties to determine the Loan
Note Principal Value will vary depending on the type of Triennial Measures
which are Enacted (or proposed), what is Enacted (or proposed) in those
Triennial Measures, and the proposed timing for the Enactment of those
Triennial Measures. In that regard, the CVR Instrument refers to two different
scenarios, and the methodologies for each of them are described below. 
 
Scenario 1 
 
Scenario 1 will only apply if: 
 
·              the Maximum Stakes Measures are the only Triennial Measure; 
 
·              such Maximum Stakes Measures stipulate only one maximum stake
for all types of game available on a FOBT; and 
 
·              such maximum stake is one of the maximum stakes set out in the
table below, or can be Linearly Interpolated between two adjacent maximum
stakes set out in the table below: 
 
 Row 1  Envisaged Maximum Stake  £50    £40    £30    £20    £10    £5     £2    
 Row 2  Base Value               42.8p  40.5p  40.4p  30.3p  13.4p  13.4p  0.0p  
 
 
Where Scenario 1 applies, the base value to be used for the purposes of the
calculation of the Loan Note Principal Value (the "Base Value") will be agreed
or determined by the Consulting Parties by means of the assessment process
described below by using the above table, or by Linear Interpolation of two
adjacent Base Values set out in the above table. 
 
The Base Value will then be converted into the Loan Note Principal Value by
using the following formula (which also takes into account the time value of
money between the Effective Date and the Loan Note Issue Date): 
 
N 
 
B * 1.07 ^  (--------) 
 
365 
 
Where: 
 
B            is the Base Value agreed or determined in accordance with the
above table; and 
 
N            is the number of calendar days between (and including) the
Effective Date and (and including) the date of calculation of the Loan Note
Principal Value. 
 
Scenario 2 
 
Scenario 2 will apply where, as at the Review Commencement Date, Scenario 1
does not apply. Scenario 2 will most likely apply if any Maximum Machine
Measures or Spin Speeds Measures are Enacted in addition to Maximum Stakes
Measures (or if any Maximum Machine Measures or Spin Speeds Measures have been
proposed by the UK Government following the conclusion of the Triennial Review
but not yet Enacted). 
 
Where Scenario 2 applies, the Consulting Parties will forecast the gross
estimated reduction in EBITDA of the Ladbrokes Coral UK Business resulting
from the Triennial Measures, taking into account, amongst other things,
estimated customer lapse rates and staking down behaviour, and then reduce
that gross estimated reduction in EBITDA by the estimated effect of any
mitigating factors or circumstances. In these circumstances, the Consulting
Parties will: 
 
·              agree or determine the estimated reduction in EBITDA of the
Ladbrokes Coral UK Business arising from the Triennial Measures (the "EBITDA
Impact Projection") by reference to a 12 month notional period for the
Ladbrokes Coral UK Business; and 
 
·              assess the EBITDA Impact Projection on the basis: 
 
·              of the Ladbrokes Coral UK Business as represented in the
financial models used by GVC and Ladbrokes Coral to calculate the Base Values
set out in the table above and therefore ignoring any changes made by GVC to
the Ladbrokes Coral UK Business on or after the Effective Date; 
 
·              that the Triennial Measures in England and any associated
mitigating factors and circumstances are of application throughout Great
Britain, notwithstanding that different legislation or regulations may in fact
be Enacted or proposed at different times in Scotland and Wales; and 
 
·              to the extent that any Spin Speed Measures or Maximum Machines
Measures have not been Enacted as at the Review Commencement Date, seek to
agree their view (or arrive at their own view) as to the most likely form in
which such Triennial Measures will ultimately be Enacted and the resulting
EBITDA Impact Projection arising out of such Triennial Measures. 
 
This process will result in an agreed or determined EBITDA Impact Projection. 
 
The EBITDA Impact Projection will then be converted into the Loan Note
Principal Value by using the following formula (which also takes into account
the time value of money between the Effective Date and the Loan Note Issue
Date): 
 
P = (6*(£140 million - E)/C+Z)*(1.07^(N/365)) 
 
Where: 
 
E          is the agreed or determined EBITDA Impact Projection; 
 
N          is the number of calendar days between (and including) the
Effective Date and (and including) the date of calculation of the Loan Note
Principal Value; 
 
C          is the total number of CVRs; and 
 
Z          is the sum of 2.8 pence, which is only added if a Consulting Party
has not made use of the table above as the basis for calculation of that part
of the EBITDA Impact Projection which arises as a result of the Maximum Stakes
Measures, in circumstances where the maximum stake stipulated by the Maximum
Stakes Measures is in the range from (and including) £20.00 to (and including)
£30.00. 
 
Steps in the assessment process 
 
The CVR Instrument envisages that the assessment process (in both Scenario 1
and Scenario 2) will comprise the following procedures: 
 
·              Step 1: the "Consultation Procedure" - the GVC Representative
and the CVR Representative will first attempt, for a period of up to 30 days
following the Review Commencement Date, to agree between themselves what the
Base Value or EBITDA Impact Projection (as applicable) should be. The Expert
may also be involved in the Consultation Procedure if either the CVR
Representative or the GVC Representative so requests; and 
 
·              Step 2: the "Determination Procedure" - if the Consultation
Procedure does not result in agreement between the GVC Representative and the
CVR Representative as to the Base Value or EBITDA Impact Projection (as
applicable), the GVC Representative and the CVR Representative shall jointly
deliver to the Expert at the same time their own assessments of the Base Value
or EBITDA Impact Projection (as applicable). The Expert shall also make their
own assessment of the Base Value or EBITDA Impact Projection (as applicable).
Of the three values, the two values which are numerically closest will be
chosen and the figure which is the arithmetic mean of those two values shall
be used for the purposes of determining the Loan Note Principal Value by using
the relevant formula above. If the Expert's assessment is at the midpoint
between those of the GVC Representative and the CVR Representative then that
midpoint shall be used for the purposes of determining the Loan Note Principal
Value. 
 
Form and status of the CVRs 
 
The CVRs will be issued in certificated registered form and will be
transferable to any person other than to a Restricted Overseas Shareholder.
The CVRs will have no nominal or principal value. 
 
The CVRs will constitute direct unsecured obligations of GVC and shall rank
pari passu with one another and pari passu with all other unsecured
obligations of GVC. 
 
The CVRs will not represent any equity or ownership interest in GVC, and
accordingly will not confer on the CVR Holders any right to attend, speak at
or vote at any meeting of the shareholders of GVC, or right to any dividends
or right to any return of capital by GVC. 
 
To the extent any meetings are required to determine matters amongst CVR
Holders, all CVR Holders will be able to vote at such meetings on the basis of
one vote per CVR Holder (on a show of hands) and one vote for every CVR held
(on a poll). 
 
Certificates in respect of the CVRs will be issued to each CVR Holder (other
than Restricted Overseas Shareholders).  If the issue of CVRs to any
Restricted Overseas Shareholder, or to any person who is reasonably believed
to be an Restricted Overseas Shareholder, would or may infringe the laws of a
jurisdiction outside England and Wales or would or may require any
governmental or other consent or any registration, filing or other formality
which cannot be complied with, or compliance with which would be unduly
onerous, the Company may, at its discretion, determine that such Restricted
Overseas Shareholder shall not have issued to him the CVRs or certificates in
respect of the CVRs and that the CVRs which would otherwise have been
attributable to such Restricted Overseas Shareholder under the terms of the
Acquisition will be held by a nominee on behalf of such Restricted Overseas
Shareholder, and the cash proceeds (if any) following the issue and redemption
of any Loan Notes issued under the terms of such CVRs be forwarded to such
Restricted Overseas Shareholder following redemption of the Loan Notes (after
deduction of fees and other costs and expenses). 
 
Loan Notes 
 
The Loan Notes will be governed by English law and will be issued with a
principal value determined in accordance with the terms of the CVR Instrument.
The Loan Notes will be issued in certificated registered form, and will be
transferable to any person other than to a Restricted Overseas Shareholder.
The Loan Notes will constitute direct, unsecured obligations of GVC and shall
rank pari passu with one another, as applicable. 
 
Certificates in respect of the Loan Notes will be issued to each Loan Note
Holder (other than Restricted Overseas Shareholders as provided for below). If
the issue of Loan Notes to any Restricted Overseas Shareholder, or to any
person who is reasonably believed to be an Restricted Overseas Shareholder,
would or may infringe the laws of a jurisdiction outside England and Wales or
would or may require any governmental or other consent or any registration,
filing or other formality which cannot be complied with, or compliance with
which would be unduly onerous, the Company may, at its discretion, determine
that such Restricted Overseas Shareholder shall not have issued to him Loan
Notes or certificates in respect of the Loan Notes and that the Loan Notes
which would otherwise have been attributable to such Restricted Overseas
Shareholder under the terms of the Acquisition shall be held by a nominee on
behalf of such Restricted Overseas Shareholder, and the cash proceeds (if any)
following the redemption of any such Loan Notes be forwarded to such
Restricted Overseas Shareholder following redemption of the Loan Notes (after
deduction of fees and other costs and expenses). 
 
Loan Notes will not represent any equity or ownership interest in the Company,
and accordingly will not confer on the Loan Note holders any right to attend,
speak at or vote at any meeting of the shareholders of the Company, or right
to any dividends in respect of the Company or right to any return of capital
by the Company. 
 
Interest on the principal value of the Loan Notes shall accrue from day to day
and will be calculated on the basis of the actual number of days elapsed and a
year of 365 days at the rate set out below: 
 
·              for the period from (and including) the Loan Note Issue Date
until (but excluding) the date falling 6 months and 1 day after the Loan Note
Issue Date, at a rate of 7 per cent. per annum; and 
 
·              for the period from (and including) the date falling 6 months
and 1 day after the Loan Note Issue Date until (but excluding) the date of
redemption of the Loan Notes, at a rate of 9 per cent. per annum, 
 
and will be capitalised, and be payable, on the Redemption Date (as defined
below) only. 
 
Other than as set out below, the Loan Notes will be issued on the Loan Note
Issue Date with a term which shall end on the "Final Redemption Date", being
the later to occur of: 
 
·              the date falling 6 months and 1 day after the Loan Note Issue
Date; and 
 
·              the date falling 18 months after the Effective Date. 
 
Loan Notes issued on a change of control of GVC or a winding up of GVC will be
redeemable immediately upon their issue. 
 
If the Loan Notes have been issued because no Maximum Stakes Measures have
been Enacted by the first anniversary of the Effective Date, the Loan Notes
will be issued with a term ending on the date falling 6 months and 1 day from
the Loan Note Issue Date. 
 
GVC: (i) may also at its option redeem the Loan Notes before the Final
Redemption Date provided the Loan Notes shall not be redeemable within the
period of 6 months and 1 day from the Loan Note Issue Date; (ii) will be
required to redeem the Loan Notes in the event of a change of control of GVC;
and (iii) will be required to redeem the Loan Notes in the event of a winding
up of GVC. (any such date being an "Early Redemption Date", and the first to
occur of the Final Redemption Date and the Early Redemption Date being the
"Redemption Date"). 
 
On the Redemption Date, GVC will redeem the outstanding principal amount of
the relevant Loan Notes for cash (together with accrued interest less any tax
required by law to be withheld or deducted therefrom). The Loan Notes will
automatically be cancelled upon redemption. 
 
Potential listing of CVRs and/or Loan Notes 
 
GVC is considering seeking an over the counter trading facility or listing for
the CVRs and/or the Loan Notes. A further announcement in relation to such
trading facility will be made in due course, but there can be no guarantee
that any such trading facility or listing will be obtained. 
 
Houlihan Lokey has not been required to confirm, and nor has it confirmed,
that resources are available to GVC to satisfy payments under the Loan Notes
and Ladbrokes Coral Shareholders will be at risk if, for any reason, GVC is
not in a position to meet its obligations under the Loan Note Instrument. 
 
5          Mix and Match Facility 
 
The Acquisition will include a Mix and Match Facility so that eligible
Ladbrokes Coral Shareholders will be entitled to elect, subject to
availability, to vary the proportions of cash and New GVC Shares they receive
pursuant to the Acquisition. Further details of the Mix and Match Facility
will be set out in the Scheme Document. 
 
The Mix and Match Facility will not change the total number of New GVC Shares
to be issued by GVC or the total cash consideration to be paid pursuant to the
Acquisition. Accordingly, elections made by eligible Ladbrokes Coral
Shareholders under the Mix and Match Facility for New GVC Shares will only be
satisfied to the extent that other eligible Ladbrokes Coral Shareholders make
equal and opposite elections under the Mix and Match Facility. 
 
To the extent that elections cannot be satisfied in full, they will be scaled
down on a pro rata basis. As a result, Ladbrokes Coral Shareholders who make
an election under the Mix and Match Facility will not know the exact number of
New GVC Shares or amount of cash they will receive until settlement of the
consideration under the Acquisition. Elections under the Mix and Match
Facility will not affect the entitlements of those Ladbrokes Coral
Shareholders who do not make any such elections. 
 
The Mix and Match Facility will be conditional on the Acquisition becoming
effective and further details of the Mix and Match Facility and which
Ladbrokes Coral Shareholders are ineligible to participate will be included in
the Scheme Document. A Mix and Match Facility will not be offered in respect
of the CVRs; each Ladbrokes Coral Shareholder will receive one CVR for each
Ladbrokes Coral Share they hold at the Scheme Record Time. 
 
If the issue of New GVC Shares to any Restricted Overseas Shareholder, or to
any person who is reasonably believed to be an Restricted Overseas
Shareholder, would or may infringe the laws of a jurisdiction outside England
and Wales or would or may require any governmental or other consent or any
registration, filing or other formality which cannot be complied with, or
compliance with which would be unduly onerous, GVC may at its discretion
determine that such Restricted Overseas Shareholder shall either (i) not have
allotted or issued to him New GVC Shares and that the New GVC Shares which
would otherwise have been attributable to such Restricted Overseas Shareholder
under the terms of the Offer shall be sold in the market and the cash proceeds
of such sale be forwarded to such Restricted Overseas Shareholder or (ii) that
the New GVC Shares shall be issued to such Restricted Overseas Shareholder but
shall be sold in the market on his behalf and the cash proceeds of such sale
forwarded to the relevant Restricted Overseas Shareholder (in each case after
deduction of broking fees and other sale costs and expenses). 
 
6          Information relating to GVC and its current trading 
 
GVC is a multinational sports betting and gaming group operating some of the
leading consumer-facing brands in the online gaming industry, including:
bwin.party, Sportingbet, PartyCasino and PartyPoker, Casino Club (a casino for
the German-speaking markets), Foxy Bingo, and betboo (bingo, sportsbetting,
casino and poker in South America). GVC has a scalable and proven proprietary
technology platform, a diversified geographic footprint and product mix, and
has over 2,800 employees and contractors globally. As at 30 June 2017, GVC had
79 million registered accounts across over 1,000 games playable in 21
languages and 19 currencies. 
 
GVC has delivered attractive shareholder returns through the growth of its
share price and through cash dividends, supported by strong cash generation
from operations. In the five years to the Last Practicable Date, GVC delivered
a total shareholder return exceeding 380 per cent. GVC's vision is to build
further scale and to diversify internationally in order to be a top three
player in the markets in which it operates. GVC's management continues to
deliver this vision through its strategy built on both organic and acquisitive
growth. 
 
GVC Shares are admitted to the premium listing segment of the Official List
and to trading on the main market for listed securities of the London Stock
Exchange. GVC is also a member of the FTSE 250 index. As of the close of
trading on the Last Practicable Date, GVC had a market capitalisation of
approximately £2.8 billion. 
 
Current trading 
 
GVC released its trading update on 12 October 2017, for the three-month period
to 30 September 2017, which included the following information in relation to
its current trading and prospects: 
 
"The GVC Group enjoyed another strong quarter with Group daily NGR +10% versus
the same period last year and +13% in constant currency. This was particularly
pleasing as the corresponding period last year was boosted by the final stages
of the UEFA Euro 2016 tournament. Underlying NGR (which includes stripping out
Euro 2016 and Kalixa - which was disposed of in May 2017) increased +18% and
21% in constant currency. 
 
Within Sports Brands, the gross win margin for the period was 11.2% (10.5% Q3
2016), ahead of our expectations of the long-term sustainable average (c10%).
Daily wagers were 4% ahead in constant currency, but as noted above, this was
against a comparative period that included the Euro 2016 tournament -
adjusting for this, underlying wager growth in constant currency was 8%. The
strength of the underlying wager growth is a reflection of the success of the
new bwin marketing campaign launched in August. 
 
Games Brands daily NGR increased 15% (+17% in constant currency) over the same
period last year. partypoker NGR grew 48% year on year, continuing to benefit
from product improvement and increased marketing investment. Casino brands NGR
also grew in Q3, whilst bingo returned to underlying growth during the period.
The decline in B2B and non-core reflects the disposal of Kalixa in May 2017. 
 
The GVC Group has also enjoyed a strong start to Q4, albeit it is just over a
week into the period." 
 
On 2 November 2017, GVC included the following additional trading update as
part of the announcement of the sale of its Turkish facing operations: 
 
"The strong start to the quarter as reported with the trading update on 12
October 2017 has continued. Daily NGR in October was 26% (29% in constant
currency) ahead of the same period in 2016, boosted by an exceptionally high
sports gross win margin, 13%, and a positive response to new marketing
campaigns." 
 
Long-term refinancing 
 
On 7 December 2017, GVC announced a E50m increase in the term loan element of
its senior secured term and revolving facility originally signed in March
2017.  This facility now comprises a E300m term loan and a E70m revolving
credit facility. 
 
The additional E50m raised will be used for potential bolt-on acquisitions and
general corporate purposes. There are no plans to draw on the revolving credit
facility. 
 
GVC has also incorporated some additional enhancements to the documentation:
the interest rate on the term loan has been reduced by 50bp to 275bp above
Euribor with a 0 per cent. floor and the leverage test governing the
availability of incremental pari passu debt under the accordion facility,
which allows the incurrence of incremental pari passu debt subject to that
test, has been increased from 2.25 to 3.5x. 
 
The Board of GVC believes that the Enlarged Group's leverage will not exceed
3.0x Net Debt/EBITDA (where Net Debt is interest bearing loans and borrowings
and customer liabilities, less cash and cash equivalents, and EBITDA is Clean
EBITDA) by the end of the first full financial year post-Completion, following
all reasonably expected outcomes of the Triennial Review. 
 
7          Information relating to Ladbrokes Coral and its current trading 
 
Ladbrokes Coral is a leading European and international betting and gaming
groups, providing its customers with a broad choice of products across a
strong multi-channel platform. The group was formed from the combination of
Ladbrokes plc and certain businesses of Gala Coral Group Limited, which
completed on 1 November 2016. Ladbrokes Coral is the largest operator in the
UK retail betting and gaming market (based on LBOs) with over 3,300 shops
across England, Wales and Scotland. Internationally the Group's European
Retail division comprises Eurobet Retail (Italy), Ladbrokes Belgium, Ladbrokes
Ireland and the Spanish joint venture Sportium. Furthermore, Ladbrokes Coral
also has a strong online presence with digital sports betting and gaming
offerings across its brands, including Ladbrokes.com, Coral.co.uk,
Galabingo.com, Galacasino.com, Ladbrokes.com.au (Australia), Eurobet.it
(Italy), Ladbrokes.be (Belgium) and the Spanish joint venture Sportium.es. 
 
The Group has identified five opportunities that are central to its existing
overall strategy: (i) the delivery of faster online growth through a leading
product offering, combined with a data-driven approach to marketing and
customer retention; (ii) leveraging its position as the United Kingdom's
largest LBO estate to grow its multi-channel offering; (iii) pursuing the
growth of the Group's extensive international portfolio of businesses; (iv)
pursuing product and technological development; and (v) delivering synergies
identified as part of the Ladbrokes Coral merger. 
 
Ladbrokes Coral Shares are admitted to the premium listing segment of the
Official List and to trading on the main market for listed securities of the
London Stock Exchange. Ladbrokes Coral is also a member of the FTSE 250 index.
As of the close of trading on the Last Practicable Date, Ladbrokes Coral had a
market capitalisation of approximately £3.3 billion. 
 
Current trading 
 
Ladbrokes Coral released its trading update on 13 November 2017, for the
period 1 July 2017 to 29 October 2017, which included the following
information in relation to its current trading and prospects: 
 
"UK Retail like-for-like ("LFL") net revenue was 1% behind with LFL OTC stakes
performance improving, as expected, on the previous quarter to 5% behind the
prior year. Following the agreement of a content deal with The Racing
Partnership in July and the resultant return of all horse racing content to
the Retail estate, the Ladbrokes Coral Group estimates that over 80% of the
volume lost due to the lack of content has now returned. This stakes
performance has also been impacted by the structural improvements made to the
Ladbrokes horse racing gross win margin which is estimated to account for c1pp
of the decline. Both the new revenue-share based content deal signed with The
Racing Partnership and the structural improvements to gross win margins will
help protect the long term profitability of the UK Retail business. LFL OTC
gross win margins were 0.4pp ahead of last year (Coral flat and Ladbrokes
+0.6pp) resulting in LFL OTC net revenue 4% behind. LFL machines net revenue
was flat year-on-year. 
 
European Retail net revenue was 17% ahead (constant currency ("cc") +12%) of
last year with European Retail stakes 10% ahead (cc +5%). Sports gross win
margins were 0.8pp ahead of last year with football gross win margins in Italy
returning to more normal levels. 
 
Digital net revenue was 12% ahead of last year and 15% ahead excluding the
Euros. Sportsbook stakes were 17% ahead (cc +14%) and 18% ahead (cc +15%)
excluding the Euros. Sportsbook gross win margin was 0.7pp ahead at 9.6% and
sportsbook net revenue 18% ahead (cc +16%). Gaming net revenue was 6% ahead of
last year, with gaming net revenue in the sportsbook-led brands 7% ahead. 
 
Growth in Ladbrokes.com.au was very strong with sports stakes 41% ahead and
net revenue 50% ahead on a constant currency basis. Eurobet.it sports stakes
were 35% ahead of last year, with sports gross win margins improving strongly
from the very poor start to the year, helping driving sports net revenue
growth of 36% on a constant currency basis. 
 
Coral.co.uk continued to perform well in what is a competitive UK environment,
growing net revenue by 13% (17% excluding the Euros). Ladbrokes.com net
revenue was 9% behind (-5% excluding the Euros). The focus on improved returns
on acquisition and retention spend in the Ladbrokes brand will reduce revenue
in the short term but will drive profitability in the medium term. Also, as
highlighted at H1, new product and feature releases were suspended, as
planned, as Ladbrokes.com was successfully migrated onto one Digital platform.
Product development continued throughout the migration and the release of new
product and features is now continuing in-line with integration plans. The
period also saw a significant reduction in the use of affiliate acquisition
channels across all UK brands. 
 
Galabingo.com grew strongly in the quarter, with net revenue 10% ahead, albeit
this progress was offset by the payout of a £1m progressive jackpot in
Galacasino.com, resulting in combined net revenue growth of 3% across the Gala
websites. 
 
Total Group net revenue was 3% ahead of last year (cc +2%). 
 
The Ladbrokes Coral Group remains in-line with its expectations for the
year." 
 
8          Completion of disposal of GVC's Turkish facing business 
 
On 2 November 2017, GVC announced the sale of the entire issued share capital
of Headlong Limited, comprising its Turkish facing business, to Ropso Malta
Limited (the "Buyer") (the "Sale") pursuant to a sale and purchase agreement
entered into between the Buyer, GVC Investments Limited (the "Seller") and
GVC, dated 2 November 2017 (the "Sale Agreement"). The Sale completed on 19
December 2017. 
 
The consideration for the Sale took the form of a performance related earn-out
payable monthly over a five-year period up to a maximum of E150m (the
"Deferred Consideration"). The first payment was to fall due five days after
the end of the second month following completion of the Sale (being 2 March
2018). 
 
The Sale Agreement provides that following completion of the Sale, the Seller
has the right to serve a 'clean break' notice on the Buyer (the "Clean Break
Notice"), notifying the Buyer that on the date that is one month following
service of the Clean Break Notice (the "Clean Break Date"), the Buyer's
obligations to pay the Deferred Consideration shall terminate. 
 
On 21 December 2017, the Seller served a Clean Break Notice on the Buyer.
Accordingly, the Clean Break Date shall be 21 January 2018. Under the Sale
Agreement, the Clean Break Notice is revocable. In the Co-operation Agreement,
GVC has undertaken to Ladbrokes Coral not to revoke the Clean Break Notice
unless the Offer fails to become Effective. Given that the Clean Break Date
falls before the date on which the first payment of Deferred Consideration was
to fall due, no Deferred Consideration will be paid nor will any Deferred
Consideration be payable by the Buyer to the Seller if the Offer becomes
Effective. 
 
9          Background to and reasons for the recommendation by Ladbrokes Coral
Directors 
 
Ladbrokes plc and certain businesses of Gala Coral Group Limited, completed a
combination on 1 November 2016 to form Ladbrokes Coral. Ladbrokes Coral has
become a leading multi-channel betting and gaming business with an impressive
reach and an international presence in major regulated markets across the
world, with net revenue of £2 billion annually. 
 
Ladbrokes Coral is the largest operator in the UK retail betting and gaming
market (based on LBOs), with over 3,300 shops across England, Wales and
Scotland under Ladbrokes and Coral brands. Ladbrokes Coral has a strong online
presence with digital sports betting and gaming offering across the brands,
supported by market-leading technology. Internationally Ladbrokes Coral has a
strong retail and online operation in Italy; strong retail platforms in
Ireland, Spain and Belgium; and strong online bookmaking brands in Australia. 
 
Since the completion of the combination on 1 November 2016, significant
progress has been made on integrating the historic Ladbrokes and Coral groups.
In terms of specific milestones, a single board, leadership and operational
teams have been implemented in the United Kingdom to support the dual brand
strategy. In UK Digital, Ladbrokes Coral now operates on a common version of
its sports and gaming platforms and uses a single trading team and trading
platform to support the entire UK business. Ladbrokes Coral's contact centre
integration has also been completed. In UK retail, over 20,000 colleagues have
signed up to harmonised terms and conditions, which has enabled the alignment
of retail operating processes. Multi-channel capability has also been improved
as customer-focused products and features have been shared and extended
between brands. Furthermore, Ladbrokes' previous head office has been vacated
and the move to Coral's Stratford office has now been completed. As a result
of this progress, in July 2017, Ladbrokes Coral announced it expected to
achieve increased synergies as a result of the combination, raising its
guidance to £150 million per annum, more than double the original estimate (at
the time of the combination). 
 
Whilst the increased scale and the strong online and retail proposition of the
combined Ladbrokes Coral business provides a favourable commercial backdrop,
the betting and gaming industry landscape continues to evolve as technology
enables new customer experiences and increasing regulatory oversight. There
has been a significant level of consolidation activity in the sector. This has
been driven by the need to meet the requirements of customers wanting a
broader suite of products and across all channels. In addition the increasing
complexity and cost of regulatory compliance can be better and more cost
effectively managed as part of a larger group. 
 
Against this backdrop Ladbrokes Coral Directors decided that whilst increased
scale, diversification, a dual-brand strategy and a clear strategic direction
are delivering results, an acquisition by GVC will optimise shareholder
value. 
 
The Ladbrokes Coral Directors believe that the offer from GVC represents a
compelling opportunity to create an Enlarged Group capable of achieving
significant strategic, financial and operational benefits. In particular, the
Offer: 
 
·              Represents a premium, assuming no payment under the CVR, of
21.2 per cent. and, assuming full payment under the CVR, of 52.7 per cent., in
each case to the Closing Price of 135.7 pence per Ladbrokes Coral Share on 6
December 2017 (being the last Business Day prior to the commencement of the
Offer Period); 
 
·              Provides Ladbrokes Coral Shareholders with a flexible
consideration structure which takes into account a range of outcomes under the
Triennial Review; and 
 
·              Is an attractive mix of cash and equity in the Enlarged Group,
resulting in Ladbrokes Coral Shareholders owning approximately 46.5 per cent
of the Enlarged Group on a fully diluted basis, providing the opportunity to
benefit from: 
 
·              The Enlarged Group's revenue and profit growth profile and
sharing in the annual recurring pre-tax cost synergies of at least £100m
(expected to be fully realised by the end of 2021 following completion of the
Acquisition) and additional unquantified capital expenditure savings and
revenue synergies; 
 
·              Combining the significant experience from both management teams
with a track record of being at the forefront of consolidation in the
industry, integrating businesses and delivering substantial shareholder
value; 
 
·              Significantly increased scale and breadth providing the
Enlarged Group with the size and resources to address the dynamics of the
rapidly changing gaming industry and regulatory environment; and 
 
·              The ability to leverage expertise across all distribution
channels and especially leveraging proprietary technology for competitive
advantage and cost reduction. 
 
Following consideration of the above factors, the Ladbrokes Coral Directors
believe that the terms of the Acquisition are in the best interests of
Ladbrokes Coral Shareholders as a whole and unanimously intend to recommend
that Ladbrokes Coral Shareholders vote in favour of the Acquisition. 
 
10         Recommendation by the Ladbrokes Coral Directors 
 
The Ladbrokes Coral Directors, who have been so advised by Greenhill and UBS
on the financial terms of the Acquisition, consider the terms of the
Acquisition to be fair and reasonable. In providing advice to the Ladbrokes
Coral Directors, each of Greenhill and UBS has taken into account the
commercial assessments of the Ladbrokes Coral Directors. Greenhill and UBS are
providing independent financial advice to the Ladbrokes Coral Directors for
the purposes of Rule 3.1 of the Takeover Code. 
 
Accordingly, the Ladbrokes Coral Directors intend unanimously to recommend
that Ladbrokes Coral Shareholders vote in favour of the Scheme at the Court
Meeting and the Ladbrokes Coral Resolutions at the Ladbrokes Coral General
Meeting, as the Ladbrokes Coral Directors who hold, or are otherwise
beneficially interested in, Ladbrokes Coral Shares have irrevocably undertaken
to do in respect of the beneficial holdings which are under their control of,
in aggregate, 9,597,395 Ladbrokes Coral Shares representing approximately 0.5
per cent. of Ladbrokes Coral's ordinary share capital in issue on the Last
Practicable Date. 
 
11         GVC Shareholder approval and recommendation by the GVC Directors 
 
Given the current size and value of Ladbrokes Coral relative to the current
size and value of GVC, and since the shares of GVC are admitted to the premium
listing segment of the Official List, the Acquisition constitutes a "Class 1"
transaction for the purposes of the Listing Rules. 
 
Accordingly, GVC will be required to seek the approval of GVC Shareholders at
the GVC General Meeting for the Acquisition. GVC is required to prepare and
send the GVC Prospectus (which will also constitute a GVC Shareholder
circular) to GVC Shareholders and also to Ladbrokes Coral Shareholders. The
GVC Prospectus will include, among other things, details on GVC Shares
(including the New GVC Shares), the Enlarged Group, the background to and
reasons for the Acquisition, and a notice convening the GVC General Meeting. 
 
The Scheme will be conditional upon, amongst other things, the passing by the
requisite majority at the GVC General Meeting of the GVC Resolutions required
to (i) approve, effect and implement the Acquisition including the grant of
uncapped indemnities to the GVC Representative and the CVR Representative
(under the Listing Rules, as a "Class 1" transaction); (ii) authorise an
increase in the authorised share capital of GVC; (iii) confer authorities for
the issue and allotment of the New GVC Shares to be issued pursuant to the
Acquisition; (iv) the disapplication of pre-emption rights in respect of the
allotment of the New GVC Shares in accordance with article 5.2(d) of the
articles of association of GVC; and (v) the amendment of the articles of
association of GVC in connection with the proposed increase in the share
capital of GVC. The GVC Resolutions will all be ordinary resolutions, save for
the resolutions to (i) amend the articles of association of GVC, and (ii)
dis-apply the pre-emption rights in respect of the allotment of the New GVC
Shares, each of which will be a special resolution. 
 
It is expected that the GVC Prospectus will be published at, or around, the
same time as the Scheme Document is published and posted to Ladbrokes Coral
Shareholders. 
 
The GVC Directors consider the terms of the Acquisition to be in the best
interests of GVC and the GVC Shareholders taken as a whole and accordingly
intend unanimously to recommend that GVC Shareholders vote in favour of the
GVC Resolutions. 
 
The GVC Directors, who hold or are beneficially interested in (or whose family
members hold, or are beneficially interested in) GVC Shares, have irrevocably
undertaken to vote (or procure that the registered holder votes) in favour of
the GVC Resolutions in respect of such beneficial holdings of 3,389,611 GVC
Shares representing, in aggregate, approximately 1.1 per cent. of GVC's
ordinary share capital in issue on the Last Practicable Date. 
 
Further details of these irrevocable undertakings (including the circumstances
in which they may lapse) are set out in Appendix III to this Announcement. 
 
12         Irrevocable undertakings and letter of intent in relation to the
Acquisition 
 
GVC has received irrevocable undertakings from the Ladbrokes Coral Directors
to vote their own beneficial holdings of Ladbrokes Coral Shares in favour of
the Scheme at the Court Meeting and the Ladbrokes Coral Resolutions, in
respect of an aggregate of 9,597,395 Ladbrokes Coral Shares, representing, in
aggregate, approximately 0.5 per cent. of the ordinary share capital of
Ladbrokes Coral in issue on the Last Practicable Date. 
 
In addition to the irrevocable undertakings received from the Ladbrokes Coral
Directors, GVC has received irrevocable undertakings and a letter of intent
from certain other Ladbrokes Coral Shareholders to vote in favour of the
Scheme at the Court Meeting and to vote in favour of the Ladbrokes Coral
Resolutions, in respect of an aggregate of 231,545,165 Ladbrokes Coral Shares
representing, in aggregate, approximately 12.1 per cent. of the ordinary share
capital of Ladbrokes Coral in issue on the Last Practicable Date. 
 
In total, therefore, GVC has received irrevocable undertakings and a letter of
intent to vote in favour of the Scheme at the Court Meeting and the Ladbrokes
Coral Resolutions in respect of an aggregate of 241,142,560 Ladbrokes Coral
Shares representing, in aggregate, approximately 12.6 per cent. of the
ordinary share capital of Ladbrokes Coral in issue on the Last Practicable
Date. 
 
Further details of these irrevocable undertakings (including the circumstances
in which they may lapse) and the letter of intent are set out in Appendix III
to this Announcement. 
 
13         Financing 
 
GVC has entered into incremental facility tranches under its existing senior
term and revolving facilities agreement (the "Existing Facilities Agreement"),
pursuant to which each of Barclays Bank PLC, Credit Suisse International,
Deutsche Bank AG, London Branch, Mediobanca - Banca di Credito Finanziario
S.p.A. and The Royal Bank of Scotland plc (trading as NatWest Markets) (as
mandated lead arrangers and underwriters) have severally and not jointly
provided to GVC additional term loan commitments of £1,400,000,000 (available
to be drawn in a combination of currencies), a bond backstop term loan
commitment of £400,000,000 (which may be redenominated in agreed circumstances
into other currencies) and a £550,000,000 multicurrency revolving credit
facility (replacing the existing E70,000,000 revolving credit facility under
the Existing Facilities Agreement) in connection with the financing of the
cash consideration payable to Ladbrokes Coral Shareholders, to refinance
certain existing indebtedness of the Ladbrokes Coral Group, to pay certain
costs and expenses and, in the case of the multicurrency revolving credit
facility, for general corporate purposes. Up to £100,000,000 of the
multicurrency revolving credit facility will be cancelled if not used within 1
year of closing to refinance certain Ladbrokes group bonds and/or amounts due
in respect of the CVR. In addition, the existing E300,000,000 term loan to GVC
under the Existing Facilities Agreement will remain outstanding, and no
consents are required from the providers of that existing term loan for the
commitments and financings described in this paragraph. 
 
Houlihan Lokey, as financial adviser to GVC, is satisfied that sufficient
resources are available to GVC to enable it to satisfy in full the cash
consideration payable to Ladbrokes Coral Shareholders pursuant to the terms of
the Acquisition. 
 
Houlihan Lokey has not been required to confirm, and has not confirmed, that
resources are available to GVC to satisfy payments under the CVRs or the Loan
Notes and Ladbrokes Coral Shareholders will be at risk if, for any reason, GVC
is not in a position to meet its obligations under the CVRs and/or Loan Notes
Instrument. 
 
14         Management, employees and locations 
 
The Enlarged Group will benefit from the expertise and talents from both
Ladbrokes Coral and GVC as it merges its operations, with the executive senior
leadership being drawn from both Ladbrokes Coral and GVC. 
 
With respect to the Enlarged Group Board, it will comprise Lee Feldman as
Chairman, Kenneth Alexander as Chief Executive, Paul Bowtell as Chief
Financial Officer, and non-executive directors who are expected to be drawn
from the current GVC Board. 
 
Whilst the Board of GVC to date has proven highly effective, in the coming
months it is intended that a review of the balance of skills and experience of
the Enlarged Group Board will be undertaken to ensure it has the optimal blend
of capability and expertise. If appropriate, the Enlarged Group will actively
pursue further appointments to enhance Board effectiveness for the medium
term. In the light of the Enlarged Group's size, the range of its activities
and the geographic spread of its business following the Acquisitions, the
Board of GVC intends, following Completion, to commission a review of GVC's
governance and compliance procedures to ensure that they remain appropriate
for the Enlarged Group. 
 
The senior executive management team of the Enlarged Group will also include
as joint Chief Operating Officers Andy Hornby, with responsibility for all
retail business in the UK and Europe and all digital marketing, and Shay
Segev, with responsibility for technology, product, customer service, and
leadership of operational and technology integrations post-Completion. The
Australian operations will report directly to CEO Kenneth Alexander. 
 
GVC and Ladbrokes Coral believe that the Acquisition will result in
opportunities for many employees in the Enlarged Group. However, GVC and
Ladbrokes Coral also recognise that in order to achieve the planned benefits
of the Acquisition, including deriving any available cost synergies,
operational restructuring of both GVC and Ladbrokes Coral is likely to be
required. Following the Effective Date, GVC intends to seek to integrate the
operations of GVC and Ladbrokes Coral as far as reasonably practicable.
Although integration plans have yet to be finalised, and any final decision
will be subject to engagement with appropriate stakeholders, this may lead to
redundancies where the businesses have overlapping functions or operational
efficiencies have been identified. 
 
The Board of GVC has confirmed to the Ladbrokes Coral Board that the existing
employment rights, including pension rights and incentive arrangements, of all
management and employees of Ladbrokes Coral will be fully safeguarded. 
 
15         Ladbrokes Coral Share Schemes 
 
Participants in the Ladbrokes Coral Share Schemes will be contacted separately
regarding the effect of the Acquisition on their rights under the Ladbrokes
Coral Share Schemes and with the details of GVC's appropriate proposals in
respect of their options and awards. Further details of the terms of such
proposals will be included in the Scheme Document and in separate
documentation to be sent to participants in the Ladbrokes Coral Share Schemes
in due course. 
 
16         Dividends and dividend policy 
 
The Boards of GVC and Ladbrokes Coral have agreed that their respective
shareholders should each be paid a dividend for the year ending 31 December
2017. 
 
In order to ensure that shareholders receive this benefit, if the Effective
Date occurs before the announcement of a final dividend by GVC and/or
Ladbrokes Coral for the year ending 31 December 2017, GVC and/or Ladbrokes
Coral each intends to declare a special interim dividend prior to the
Effective Date in an amount equal to whatever amount the final dividend for
the year ending 

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