UPDATE 1-Desmond fights on soon after Ladbrokes shareholders back Gala Coral deal

(Adds additional Desmond comments, board response, shares)

By Paul Sandle

LONDON Nov 24 Shareholders in British bookmaker Ladbrokes strongly backed its planned merger with rival Gala Coral on Tuesday but rebel investor Dermot Desmond vowed to fight on.

Ladbrokes agreed the two.3 billion pound ($ 3.five billion) all-share merger in July to give it the clout to make a larger splash on the internet, exactly where it has been outgunned by rivals.

It is one particular of a series of offers in the gaming sector, which has been hit by higher taxes and tighter regulation.

The holders of 96 % of Ladbrokes shares voted to approve the deal at a meeting on Tuesday.

But Desmond, the Irish billionaire owner of Celtic soccer club, argues it is not the answer to Ladbrokes’ online troubles and will as an alternative saddle the group with debt and outcome in lower payouts to shareholders.

The tycoon, who holds a two.eight percent stake, was sharply critical of the betting group’s management at the meeting.

“I believe there is widespread acceptance that the Ladbrokes board and management are not excellent sufficient and that efficiency over the final five years has been abysmal,” he mentioned.

He voiced issues about a 75 million pound payment it had agreed to make to Playtech, the company providing its on-line platform, as a outcome of the deal.

He also said there was no clarity on the benefits the tie-up would create, till regulators had decided how many of the combined group’s around 4,000 shops would want to be sold.

Chairman Peter Erskine acknowledged “there had been things we could have completed differently”, but he stated the Coral merger was the very best way to obtain the scale required to succeed on the internet.

Soon after the meeting, Desmond called the board’s method “a slap in the face to the shareholders” and mentioned he would continue the fight. “This is only the very first round of 15 rounds,” he stated.

Desmond stated one particular alternative would be to convene an additional shareholders meeting, for which he would need the support of the holders of 5 percent of the shares.

Ladbrokes announced the terms of the deal with Coral, owned by group of private equity companies which includes Apollo, Anchorage and Cerberus, in July.

Desmond, who said he had bought his stake about nine years ago at around 3 pounds a share, did not make his issues public till a week ago.

The shares were trading down .5 percent at 110 pence at 1500 GMT. ($ 1 = .6630 pounds) (Editing by Jason Neely and Keith Weir)

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