The on-off sale of Britain’s biggest bingo club chain looks to be back on the cards amid renewed interest from private equity in backing a management buyout.
More than 18 months after Gala Coral Group first tested the water on a sale of its chain of 132 bingo clubs, it is understood that a deal worth up to £250 million could be four to six weeks away.
A deal is tipped to be structured as a management buyout led by Simon Wykes, the Gala Bingo managing director for the past five years and a former managing director of Mecca Bingo, its closest rival.
The number of suitors still in the running remained unclear last night, although one source tipped an American special purpose acquisition company led by Lorne Weil, the former chief executive of Scientific Games, the lottery and gaming group.
Other potential bidders touted over the past 18 months have included Luke Johnson’s Risk Capital Partners; Henry Jackson’s OpCapita investment vehicle; Bridgepoint, the former owner of Riva Bingo; and Gauselmann Group, of Germany, which owns Praesepe, an operator of adult gaming centres and amusement arcades.
Another putative buyer last year was John Kelly, who led a £236 million buyout of Gala Bingo from the old Bass brewing empire in 1997, working with Park Square Capital, part of the consortium of investors that controls Gala Coral.
Mr Kelly, who is a non-executive director at Ladbrokes, went on to use Gala Bingo as a platform for turning Gala Coral Group, as it became, into a gambling conglomerate, adding casinos, betting shops and online operations to its bingo halls.
The resultant £2.6 billion debt burden eventually forced the company into a painful financial restructuring and kicked off a break-up. It sold its casinos to Rank Group in 2013, and the sale of its bingo division is likely to lead to an initial public offering or sale of its bookmaking and online operations.
Mr Wykes caused raised eyebrows shortly after Gala Bingo was first put up for sale in 2013 when he suggested that investors should avoid the sector “unless they have a huge amount of capital and don’t mind paying over the top”.
At the time the bingo sector was beset by a punitive tax regime and the prospect of a sale fell away, although it moved back on to the agenda last summer after the unexpected halving of bingo duty in the budget made a sale a more attractive proposition.
None of the parties involved could be reached for comment.