GVC Holdings PLC (LON:GVC) has noted that the UK government’s move on Tuesday to enact the cut in maximum staking levels to £2 on fixed-odds betting terminals (FOBT) means it will cancel a contingent value right (CVR) payment to shareholders.
As part of its acquisition of Ladbrokes Coral, which completed in March this year, the FTSE 100-listed firm agreed to pay a CVR linked to the FOBT legislation, which was worth 35p per Ladbrokes Coral share if the legislation was not enacted by 28 March 2019.
In a statement on Wednesday, GVC said the CVR Instrument requires a period of 10 business days to elapse post-enactment of the law before the formal valuation process can be completed by the representatives of GVC and the CVR holders.
The group, therefore, said it expects to be in a position to announce the cancellation of the CVRs on or around 7 January 2019.
In a note last week, analysts at Citigroup said they thought the enactment of the cut would be a "significant positive catalyst" for the GVC shares as it could eliminate the possibility the company would have to pay out around £676mln to CVR shareholders.