Gala Purchase of Coral Confirmed
Published: Friday, October 14, 2005 Online-Casinos.com
GALA PURCHASE OF CORAL CONFIRMED
GBP 2.18 billion deal to create a new European gambling top dog
The speculation last week (see previous Online-Casinos.com and InfoPowa reports) that British casino and bingo group Gala was about to purchase Coral Eurobet has been confirmed by a Reuters report that agreement has been reached at GBP 2.18 billion.
The report quotes Gala in saying that the deal will merge Gala's casinos and bingo halls with Coral's betting shops and dog tracks, creating Europe's leading privately owned gaming company worth more than GBP 4 billion, with more than 2.2 million customers visiting 1,450 outlets.
"Nobody rivals us now, because nobody has an integrated company with licensed betting offices, casinos, bingo and online gaming all in one group," Gala Chief Executive Neil Goulden told Reuters.
Analyst Robin Chhabra at Evolution Securities said the combined group was perfectly positioned to take advantage of the country's gambling deregulation, which allows casinos to advertise and loosens stringent membership rules. "This is a great vehicle to take advantage of deregulation, with a full suite of assets that will benefit," he said.
Goulden, who along with Chairman John Kelly keeps his job at the enlarged company, said betting and bingo would benefit from deregulation, with extended opening hours and bigger jackpots.
The group will now be Britain's third-largest bookmaker, with 1,267 betting shops, its largest bingo operator with 167 clubs, and one of the top casino operators, with 30 venues. Both companies have a strong presence on the Internet, which was where Goulden said the firm would receive its biggest boost from merging.
"We are going to combine their Eurobet business with our fledgling interactive business -- Internet, television and telephone betting," said Goulden. "If you put those together, plus our 7 million database of customers, you're going to drive significant online revenues," he added.
The deal is backed by private equity groups Candover, Cinven and Permira, all of which hold equal stakes in Gala. Each of them is increasing its investment in the enlarged company by GBP 275 million to help finance the acquisition.
Permira bought a GBP 200 million stake in Gala from Cinven and Candover in August, ending months of speculation Gala was planning to float on the stock exchange.
Coral Chief Executive Vaughn Ashdown and Finance Director Mick Mariscotti will stay on to help integrate the two companies.
Lehman Brothers and Royal Bank of Scotland are arranging the debt backing the deal. Banking sources told Reuters that the debt would total around GBP 3 billion and would be launched in the next two to three weeks.
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