Irish businessman Dermot Desmond is calling on Ladbrokes shareholders to oppose the bookmaker's planned €3.3 billion merger with rival Coral.

Mr Desmond, who has been a shareholder in Ladbrokes for nine years and sold his Betdaq betting exchange to the group, warns that the Coral merger is the “wrong deal” for the company.

In an open letter to shareholders, he calls on them to vote against the deal at an extraordinary general meeting on Tuesday and to insist that an independent board committee review all strategic options open to Ladbrokes.

Mr Desmond argues that the real winners will be Coral’s shareholders. “Make no mistake – this is a zero premium acquisition of Ladbrokes by Coral,” he says.

Ladbrokes's failure to compete with rivals in the growing on-line betting market has left it trailing competitors such as Paddy Power and William Hill.

“The shareholders in Ladbrokes have passively accepted all the bad news and the loss of value heaped upon them by the Ladbrokes board and management over the last 10 years,” he says.

“It may be tempting to just wave through the Coral merger – surely it can’t be any worse?” he asks.

Ladbrokes said in a statement that it it was not suprised by his comments as “he has been in extensive dialogue with the management team and not been afraid to talk of undertaking such action”.

The company added that as a shareholder he has a right to express his view and vote accordingly at Tuesday’s meeting.