GVC Holdings shares jump 5.6 pct

The company’s stock value went up as a ruling in the UK excused it from a major cash disbursement to former Ladbrokes shareholders.

UK.- GVC Holdings posted a substantial increase in its stock value this Wednesday after a regulatory decision that favoured its operations. The company’s shares were up 5.6% as a government ruling excused it from a major cash disbursement to former Ladbrokes shareholders.

GVC was bound to pay €760 million to Ladbrokes’ former shareholders as they issued securities known as Contingent Value Rights (CVRs) when they took over the company. Had a cap on the maximum stake on fixed-odds betting terminals (FOBT) been introduced before March 28 2019, GVC would’ve been liable for the payment. However, it is expected to be brought forward from October to April, the government said.

“The one-off cost to GVC of the earlier implementation of the FOBT (caps) is around 80 million pounds, so materially less than it would have to pay out if implementation was delayed,” said Simon Davies, analyst at Canaccord Genuity, while Berenberg Bank analysts added: “With this risk dispelled, and with certainty on the regulatory outcome in the UK, we think many negative catalysts are out of the way.”

“It looked over-sold, with valuations factoring in an awful lot of negative regulatory news,” said Canaccord Genuity’s Davies.