Bookmaker Boylesports is lining up a bid for rival Ladbrokes Ireland, which is under court protection from its creditors to allow it to restructure the business.
Ladbrokes has been working its way through a rescue plan for the loss-making chain with High Court-appointed examiner, Ken Fennell of Deloitte, under which it plans to close up to 60 of its 196 betting shops in the Republic and cut around 250 jobs.
However, the privately owned Boylesports has approached Mr Fennell and is in talks with him regarding an alternative plan. Boyles first approached the examiner shortly after his appointment was confirmed in late April.
Its proposals are also likely to include betting shop closures, but will involve offering better terms to creditors, a group mainly made up of landlords, than those that Ladbrokes has put on the table.
A number of landlords have complained that Ladbrokes is offering derisory compensation for surrendering the leases on the shops that it is planning to close.
One said last week that its terms effectively amounted to an offer of between €12,000 and €24,000 on a lease on which €467,500 is due over the next five years. Another said that he could expect €6,000 in return for allowing it to surrender a lease worth €275,000 over the same period.
Ladbrokes has told the property owners that if they do not accept these terms it will ask the High Court to allow it repudiate the leases, which examinership law allows it to do.
Cork businessman Tony Sexton whose company is landlord of a shop in the city that the chain intends closing, said that he had been contacted by both Boylesports and Paddy Power in relation to the premises. He has sought further information from Ladbrokes regarding its surrender offer.
Boylesports will have to convince the examiner that its alternative plan is better than the current proposals on a number of fronts if it is to succeed in getting his support.
The chain will also have to get any bid past the Commission for Competition and Consumer Protection, which will have to be notified of any deal between the two. The regulator could demand that Boylesports offloads some outlets to another operator before allowing it to take over its rival.
While third-party funding is not unusual in a examinerships, they normally have the examiner's support from the outset. Solicitor Barry Lyons of law firm Lyons Kenny, said that a third-party proposals would have to "demonstrably superior" to what is currently on offer.
‘Very active’
Boylesports chief executive and founder
John Boyle
would not comment directly on the Ladbrokes examinership. “We in Boylesports are committed to making sure that we have the best shops in the best locations for our customers,” he said. “We have been very active in recent years in ensuring that need is met and we remain open to opportunities as and when they arise.”
Ladbrokes Ireland said it remained committed the process and to saving as many jobs as possible in the Republic.
