Background to this story
GVC Holdings has publicly distanced itself from allegations arising from a Sunday Times article about the sale of the company’s Turkish business in 2017. GVC share prices were turbulent when the market opened on Monday.
According to the Sunday Times report, the chief executive of GVC Holdings, Kenneth Alexander, came to an agreement in 2017 to sell off the company’s Turkish business. The buyer was an IT service provider to GVC Holdings. The allegations are that the sale was done to speed up the process of acquiring the Ladbrokes Coral Group.
The reason, the Sunday Times reports, was that: “Gambling in Turkey is highly restricted and GVC’s operations there were seen as a stumbling block to regulatory and shareholder approval.”
Initially, this part of the business was to be sold for €150m (£135m; $168m) to Rospo Malta, the provider of IT services to the company in Turkey. However, the payment was subsequently waived in order to push through the merger on time.
Alexander co-owns a Scottish stud farm with Ron Watts, a co-owner of Rospo. The Sunday Times suggested that those relationships raise questions about the deal between the two parties involving the Turkish business.
The newspaper’s team said they approached GVC Holdings for a comment, but received a reply that GVC Holdings was “not prepared to fuel your nonsense.”
Rebutting these claims
In a statement released on Monday, GVC said that selling their operations in Turkey was a specified condition of the deal to purchase Ladbrokes. It added that the Ladbrokes board had recommended this course of action and disclosed it in December 2017.
The statement went on to claim that selling these operations was a competitive process. The company was kept at arm’s length during negotiations, the deal was overseen by the Houlihan Lokey investment bank, and all the details of the disposal have been completely disclosed.
Since selling these operations, GVC has had no indirect or direct role in the Turkish market. The company denied any claims that the senior management or the GVC group benefits from the Turkish market in any way. It is now focusing its efforts on becoming a market leader in the United States, as well as in other regions where gambling is expanding.
GVC Holdings has a number of different interests in the gambling space. This includes sports brands such as Ladbrokes, Sportingbet, and bwin, and gaming brands like PartyPoker, PartyCasino, and Foxy Casino. GVC is listed on the London Stock Exchange and employs more than 2,800 people around the world.