Gala bingo clubs linked to sale
Gambling group Gala Coral is reportedly considering putting its bingo clubs up for sale for more than £250 million as it readies itself for a stock market flotation.
The group is poised to appoint an investment bank to lead a strategic review of the company, which is likely to recommend offloading the 140-strong Gala Bingo chain to pave the way for a listing, according to The Times.
Speculation has been mounting over Gala's plans for a flotation, which could see the group valued at more than £2 billion.
A flurry of firms have listed or are planning initial public offerings (IPOs) to take advantage of buoyant conditions in financial markets, with estate agency Foxtons the most recent to float and Royal Mail set for privatisation in a £3 billion listing.
But Gala is understood to have a number of headaches to resolve ahead of any IPO, with its bingo arm having struggled amid difficult recent trading.
Figures for its third quarter to July 6 showed Gala Bingo's underlying earnings dropping by more than a fifth, down 21% to £11.9 million as admissions fell 6%.
Trading is unlikely to have been helped since then due to the hot summer weather seeing many players shun bingo halls, with Mecca Bingo owner Rank Group cautioning in August over the impact of the heatwave.
Despite the trading woes, Gala has reportedly already received unsolicited approaches from private equity firms for the bingo business.
It is thought the group may look to sell-off the worst performing venues to smooth the way for a sale of the remaining chain, although it would likely retain the online bingo business and Gala name.
There is also uncertainty surrounding the management team ahead of a potential float, with pressure surrounding former HBOS boss Andy Hornby's role as chief executive of its Coral bookmaking division.
He has already faced immense scrutiny since a damning report into the HBOS collapse accused him and fellow former bosses of serious management failures, which are said to rule him out of running a quoted Gala Coral.
The group's chairman Rob Templeman is also believed to have told colleagues he does not want to chair Gala once its lists.
Gala - headed by group chief executive Carl Leaver - is owned by a consortium of US investors and hedge funds.
The group was not immediately available for comment.