Although the group said there was no certainty of a deal taking place, it may carry out a share placing if it went ahead to strengthen the enlarged group’s balance sheet.
Ladbrokes boss Jim Mullen, who took over from Richard Glynn on 1 April, said: “Since becoming chief executive my focus has been on a more aggressive plan to build digital scale and grow our recreational customer base across all channels, which is key to creating a more sustainable and growing Ladbrokes. My plans are well advanced and I look forward to presenting them to shareholders.”
He added: “A merger with Gala Coral could create a combined business with significant scale and has the potential to generate substantial cost synergies, creating value for both companies’ shareholders.
“The board has not yet concluded whether a transaction is strategically attractive and can be delivered to shareholders on appropriate terms.”