LONDON (Reuters) - British bookmaker Ladbrokes (L:LAD) said the rationale for its proposed acquisition of rival Gala Coral was "compelling" in response to opposition from Irish billionaire shareholder Dermot Desmond.
The two companies agreed an all-share merger in July to create a 2.3 billion pound betting group that would seek to build on its dominance of Britain's high streets to expand its online business.
Desmond wrote to fellow shareholders on Tuesday urging them to vote against the deal next week, saying a merger was not the right way to create the new management team needed to build its online business.
"Giving away half your company and taking on over 800 million pounds of debt is a very expensive way to recruit a quality management team," Desmond said in the letter.
He said Ladbrokes shareholders risked a 66 percent reduction in dividends.
Ladbrokes said it had noted the letter but remained confident that shareholders would see the attractions of the merger, including the potential to deliver faster online growth.