Apollo Group Makes Bid for Gala Coral

According to the U.K.'s Sunday Times the private equity giant Apollo from the U.S.A. is planning a last minute take over of U.K. bookmaker and bingo operator Gala Coral with a financial restructuring plan. Apollo's proposition is to pay £250m (€281.6m) in exchange for a 50 per cent share of the company. This is the latest episode in the bid for controlling interest of Gala, which is owned by the private equity firms Candover, Cinven and Permira. There were reports recently that the Blackstone Group was also interested in acquiring the Gala Coral assets. A group of the gaming company’s junior lenders were reportedly looking to take control of Gala also. Apollo would have majority voting rights, should the deal be accepted, in effect giving Apollo control. Senior lending partners would receive the offered funds with junior lending partners receiving the remaining fifty percent of shares. Gala has run into difficulties of late due to unexpected taxes and new changes in the regulations in the U.K. Gala has a debt load of 2.9 billion euros which combined with the recession and lower consumer spending has made the debt almost unmanageable.

Executive Chairman Neil Goulden,said,"Given the Group's strong competitive position and very solid cash flows, we continue to believe that a consensual restructuring is a viable and realistic prospect and I will continue to lead and facilitate this process with the engagement of all stakeholder groups,"

"The Board has received a number of offers and is currently discussing these with the Senior Lenders Coordinating Committee...we would expect to make significant progress in the coming weeks and be able to update on progress early in the New Year,"

Apollo is familiar with the gambling industry with one of the world's largest casino operators Harrah's Entertainment within it's portfolio. Apollo bought bonds in the debt-laden casino chain. Along with Blackstone Group and TPG, the firm bought Harrah's in a $27 billion buy-out in January of 2008.