The two bookmakers agreed an all-share merger in July, creating 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.
In a letter to shareholders Desmond, majority shareholder in Scottish football club Celtic, said Ladbrokes needs a new management team to shift more of its customers online, but said a merger was not the right way to achieve this.
"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. "The real winners in this transaction are the Coral shareholders."
Ladbrokes promoted Jim Mullen, the head of its digital business, to the chief executive's role in March, reflecting the need to compete harder in the expanding online market.
In the letter, Desmond says that Ladbrokes shareholders would suffer a 66 percent reduction in dividends and says a merger with Coral would not provide it with the proprietary technology platform he believes it needs.
He said he believes synergies will be difficult to deliver as Coral and Ladbrokes would maintain separate brands and two trading teams.
Ladbrokes was down 0.4 percent on Wednesday at 1.09 British pounds per share at 1415 GMT compared with 1.24 pounds when the deal was announced on July 24.
A spokesman for Desmond said that he had a "substantial shareholding" in Ladbrokes. A Ladbrokes spokesman said Desmond appeared to hold at least 1 percent but possibly double that.
Ladbrokes said in a statement that it was not surprised by Desmond's views, but remained "confident that shareholders see the attraction of the proposed deal."
(Reporting by Conor Humphries; Editing by Keith Weir)
