October 08, 2009

Ladbrokes’ raiser deal

Ladbrokes is raising money to pay down debts and the bankers are cashing in as usual but chief executive Chris Bell reckons he managed to push the fees down.

The bookie is asking investors to stump up £287 million, of which £12 million will go to UBS, Deutsche Bank, Greenhill and others.

Amid growing irritation from corporations at the price banks are charging to underwrite rights issues, Bell says he drove a hard bargain. “As a board we pushed back hard on this. At 3% of the amount raised, the fees are towards the lower end,” he said.

All the proceeds will be used to reduce debt of £962 million, following a similar move by arch-rival William Hill.

“We are not dressing this up as a war chest. William Hill lowered the bar for what the debt-to-profit ratio could be so we knew we had to do it. The last tipping point was recent trading,” said Bell.

That trading has been tough. Profit for the three months to end-September fell 58% to £22 million. Ladbrokes is blaming fewer draws in Premier League matches for its bad run.

The one-for-two rights issue is priced at 95p a share.

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