Gala Coral has made a positive move to divest its bingo division by recruiting Lazards to set up a sale, according to the latest reports in the Financial Times. Any sale would allow the company to concentrate on its betting business, mainly the UK’s third biggest retail estate.
The gambling operator is hoping that its 135 bingo halls will generate up to £300m in a sale, especially after the recent bingo-friendly budget halved the tax on land-based bingo operations. Interestingly, the company plans to keep hold of the interactive bingo arm.
The group has been trying to offload its bingo division ever since it sold off its casino portfolio to the Rank Group just over a year ago, although no one seemed interested in investing £250m in a struggling market with a punitive tax regime compared to other sectors of the gambling industry.
However the mood has now changed and the Gala Coral hierarchy thinks that an auction involving trade and private equity buyers will boost the price and help it relieve its balance sheet. It will also help provide a number of Gala Coral’s hedge fund owners to seek an exit from the business. An IPO has also been mooted as a possible route in the mid-future.