Based on the respective share prices of Ladbrokes Coral (135.70p) and GVC (909.00p) at the close of business Wednesday, the offer values Ladbrokes Coral at 160.9p per share, equating to a total equity value of £3.1bn.
The possible offer for Ladbrokes Coral would include 32.7p per share in cash as well as 0.141 GVC shares for each Ladbrokes Coral share. GVC shareholders would be entitled to the rest.
The news comes just a year after Ladbrokes and Gala Coral completed a merger.
After the deal Ladbrokes shareholders would hold around 46.5pc of shares in the enlarged business, with GVC's backers owning the remainder.
GVC, which boasts 79 million registered accounts and operates in 21 languages through names such as sportingbet and partypoker, previously bought bwin.party in 2016.
The value of the CVR, which would be satisfied by the issue of loan notes by GVC, will be determined by the outcome of the UK's ongoing Triennial Review relating to the regulation of Category B2 fixed-odds betting terminals (FOBTs) and its estimated impact on the run-rate profitability of Ladbrokes Coral's United Kingdom business.
The government has said the maximum stake allowed in FOBTs could be sharply cut over concerns that the terminals fuel addiction.
The two companies in a joint statement on Thursday said that they were in detailed discussions regarding the possible combination of their two businesses.
In addition, the companies have agreed that should the deal go through, Kenneth Alexander, now chief executive of GVC, would take on the same role at the enlarged group.
The tie-up would put the newly formed group in a strong position in major markets such as the UK, Italy and Australia, it added. In October it started a 12-week consultation to consider cutting the stake to between 50 pounds and 2 pounds, from the current 100 pound wage.
GVC said the deal would enhance earnings per share by a double digit level from the first full year of completion.
"GVC's recent move to exit Turkey cleared the last barrier and LCL shareholders should be pleased to see the firm is now better insulated against the vagaries of the United Kingdom market", said Neil Wilson, senior market analyst at ETX Capital.
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