An unexpected initiative from across the Atlantic spices up the market
The battle for control of the UK online and land gambling group Gala Coral took an unexpected twist this week when the US-based private equity firm Apollo made its unexpected move, offering GBP 250 million to secure 50 percent of the gambling company's shares.
Gala Coral is at the centre of several attempts by British private equity companies and lenders to gain control and enable the company to clear some of its GBP 2.6 billion debt burden
Gala operates a significant online bingo and casino business along with land gambling interests of some 2 000 betting shops, 148 bingo clubs and 227 casinos.
Apollo is not inexperienced in matters gambling, holding a substantial shareholding in one of the world's major gambling enterprises, Harrah’s Entertainment in the United States.
According to a Times Online analysis of the Apollo offer, the American company proposes to pay GBP 250 million to the company’s senior lenders. Junior lenders would be given the remaining 50 percent of the equity. However, Apollo would have majority voting rights, in effect handing it control. The scheme is unlikely to be well received by existing shareholders, who would receive nothing.
Gala’s main lenders are due to deliver their verdict before Christmas on which restructuring proposal they prefer, after which it is likely that the deal will be finalised by the northern hemisphere spring.
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