Blackstone to Bid for Gala Bingo’s Parent Company
Wednesday, 25 November 2009 | Written by Carol Dian
As published in the Telegraph, Blackstone, the American private equity giants, is in position to make an intervention on the £2.5bn debt restructuring of struggling Gala Bingo's parent company, Gala Coral. The bookmaking and bingo operation currently have an agreement with their private equity owners and junior lenders to help keep the bingo and bookmaking operations as a single entity.
The intervention of Blackstone could see them inject up to £300m into the ailing business in return for a majority stake, effectively usurping the agreement that Gala Coral currently have in place with Cinven, Permira and Candover.
The Blackstone deal would offer senior lenders, who are current owed somewhere in the region of £2bn, the opportunity to keep their debt in place while offering the mezzanine debt holders a minimal equity stake.
Gala Coral currently operate more than 2,000 licensed bookmaking outlets and 148 land-based bingo halls as well as a number of casinos. The group has seen earnings plummet by 7% during 2009 to £340m.
The acquisition of Gala Coral would be a huge move for Blackstone, who has recently seen their UK profile raised by the £2bn flotation of Merlin entertainments, the holding group behind UK land attractions like Alton Towers and Madame Tussauds.
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