Britain’s Gala Coral Group has hired investment banker Lazard to find a buyer for its 135 bingo clubs as the company looks to clear the decks for a £2 billion-plus IPO of its remaining betting and gaming businesses.
Gala, the biggest bingo operator in the country, said it has “commenced a process to explore the possibility of a disposal” of the venues.
Analysts expect the sale of Gala Bingo, estimated to be worth more than £250 million, will eventually lead to an initial public offering of the company’s dominant bookmaking business. Gala Coral has more than 1,800 betting shops in Britain, although it said it may close some in response to government plans to raise the tax on electronic table game revenue, the mainstay of betting shop revenues nationwide, to 25 percent.
Gala Coral became the latest bookmaker to warn that it will be forced to close shops this year. Both William Hill and Ladbrokes have been closing outlets, blaming it on the increase in tax, which will include a 15 percent point-of-consumption levy on online gambling come December.
Racing is another weakness. Gala Coral, which is owned by a consortium of U.S. investors and hedge funds, said the profitability of racing in its betting shops “has halved over the last five years and shows no sign of abating.” The group called for a reduction in the horse racing betting levy, which bookmakers pay to help fund the industry.
Gala Coral posted an 18 percent jump in total group pre-tax earnings, to £67.2 million in the latest quarter, which the company attributed to the World Cup and a strong online performance. Earnings at the bingo division improved from £6.6 million to £8.2 million.