Gala Group in talks with Coral Eurobet

[ian]

28th September,

Both the Times and Financial Times carry reports this morning that Gala Group are taking a serious look at purchasing the betting offices and interactive betting arm of Coral Eurobet.

http://www.galagroup.co.uk
http://www.coraleurobet.com

Bingo group Gala in talks over bid for Coral
http://news.ft.com/cms/s/6e69afe2-2f...00e2511c8.html

Gala in battle with equity firms to take over Coral
http://business.timesonline.co.uk/ar...801739,00.html


The deal would be valued at around £2 billion with £800 million in equity and the assumption of £1.2 billion in debt. The combined entity* being then worth close to £4 billion.


Further links on this story including news about the Gala & GMB Union negotiations will be posted when found.



*What would the company be called ? Answers on a postcard please
Gala Coral Eurobet is a mouthfull (www.galacoraleurobet.com) so one would presume the Coral and Eurobet names would be dropped.

However it's early days yet and Coral I'm sure will be aware that there are lots of other fish in the sea.

Ian

[mick]

That looks like work for us in the GMB then!

[Craig]

Hi,

I go for galabet, they already own the domain www.galabet.biz but the .com & .co.uk are taken by another company.

Craig

[ian]

6th October

The Times, Daily Telegraph and Independent are all reporting this morning that Gala and Coral Eurobet are close to agreeing a deal that values CE at "between £2.1 billion and £2.2 billion including debt".

Gala set to place £2bn on takeover of Coral
http://business.timesonline.co.uk/ar...813004,00.html

Coral Eurobet on brink of takeover
http://www.telegraph.co.uk/money/mai.../ixportal.html



Here are a couple of additional quotes...


The Times

"The enlarged group will be led by the current Gala management headed by John Kelly, chairman, and Neil Goulden, chief executive. Mr Goulden knows the sector well, having previously spent 14 years at Ladbrokes, the bookmaking arm of Hilton Group.

Coral’s 1,260 betting shops, together with its internet and telephone betting operations, will become part of a company that has 166 bingo clubs with a total of six million members and 28 casinos in the UK plus two in the Isle of Man and Gibraltar.

Gala was formed in 1997 through a £236 million buyout of Bass’s bingo arm led by Mr Kelly. In March 2000 it was acquired by CSFB Private Equity for £400 million and later that year it bought Ladbrokes Casinos for £235 million. Three years later it was acquired by Candover and Cinven for £1.24 billion."



Daily Telegraph

"The deal will also create substantial windfalls for Coral's management team, who own 16pc of the equity and rolled over much of their holding at the time of the Charterhouse buyout. The management's stake is expected to be worth over £140m.

Vaughn Ashdown, the Coral chief executive, stands to make more than £40m. He is expected to stay on for the time being as head of the bookmaking business and to assist with the integration of the companies. Coral's finance director Mick Mariscotti is also expected to stay on for now."



With so much wedge on the table I'm not surprised by the Telegraph quote...

"The cash deal is expected within days and could come as early as tomorrow, with advisers working to hammer out the final terms by the end of the week. "They are trying to do the deal before the weekend," said a source close to the talks last night."



He want's a pen, somebody give him a pen and keeeep smiling!


Ian

[ian]

The major British and financial newswires have news that the proposed deal between Gala Group and Coral Eurobet is sorted and as reported earlier - before the weekend !

Here are the main online links found so far and there will surely be 4 or 5 more from early Saturday morning once the broadsheet press websites have been updated.

Gala buys Coral to form 4 bln gaming group
http://uk.news.yahoo.com/07102005/32...ing-group.html

Coral chief is £40m winner
http://www.thisismoney.co.uk/news/ar...8&in_page_id=2

Gala Agrees to Buy Coral Eurobet for $3.8 Billion
http://www.bloomberg.com/apps/news?p...N4PdM&refer=uk

The Bloomberg story gives the numbers a good crunching and here are a couple of quotes...


"Combining Coral Eurobet with Gala's 167 bingo halls and 30 casinos will create a business able to capitalize on the U.K. government's relaxation of Britain's 37-year-old gambling laws. Coral's betting shops and Gala bingo halls will get extended opening hours under proposed deregulation, while casinos will be able to market for the first time and have more slot machines."


"The (Coral) management's 16 percent stake in the company is worth about 160 million pounds after debt is excluded.

The transaction gives Gala a value of 4.24 billion pounds, Goulden said. That includes equity of 1.47 billion pounds, debt of 2.31 billion and mezzanine finance of 460 million pounds, he said.

Candover, Cinven and Permira are each investing 275 million pounds to maintain their equal ownership of the business."


Further links will be posted including the full press release in PDF which I've just noticed is in my inbox and was dispatched at 13.58pm this afternoon.


Ian

[ian]

It appears as though all involved with the deal managed to get out of the office before the worst of the Friday rush hour traffic. Wrapping things up quickly is also convenient as England are playing Austria at 4pm on Saturday in what's now a crucial World Cup qualifier.

I doubt if anyone present would have wanted the books still to be on the table as Beckham & Co walk out onto the pitch at Old Trafford.
http://www.thefa.com


The prices on the game by the way are...
1/6 9/2 and 11/1 at Coral
http://www.coral.co.uk

and at Eurobet
1.17 5.75 and 13 which is very marginally better !
http://www.eurobet.com

But checking with Betfair one can find...
1.22 7 and 20 for a 101.3% book and it's 101% if you get 21's on Austria.

Betfair themselves I'm sure will be hitting the market sometime during 2006.


The earlier headline from the London Evening Standard - "Coral chief is £40m winner" I thought was a little mischievous.

" FORMER Mr Universe finalist today scooped a £40m fortune from the sale of bookmakers Coral to bingo and casino operator Gala. Bodybuilder Vaughn Ashdown, Coral's chief executive, is the biggest winner from the sale, but a total of 60 top managers are to share a pot of about £128m from the takeover "


The £128 million is for the 16% that management at Coral Eurobet presently hold in the company. Such a handsome payout is very difficult to imagine so I thought it would be easier if it were compared with the CSP jackpot presently on offer at Gala Casinos.

http://www.galacasinos.co.uk
http://www.jackpotstudpoker.com

Right now it stands @ a tasty £307,252 for a Royal Flush and £30,725 for a Straight Flush.

So by my calculations Mr A has been dealt 130 Royal Flushes and the rest of the management team have turned over 286 between them.

I certainly wish I could get some of these banker chaps to deal to me !


Ian

[ian]

The Gala - Coral Eurobet press release in PDF format is now available at Gamingfloor.com.


Gala and Coral Eurobet to form Europe's largest integrated betting and gaming company
http://www.gamingfloor.com/pressrel2...ralEurobet.pdf

The 4 page release gives background details on the investments involved, the reasoning behnd the deal and management/executive bio's of the two companies.


The following quote perhaps sums up the their future strategy...

Commenting on the deal, Neil Goulden, Gala chief executive, said:

"Coral Eurobet is an ideal fit with Gala. It is a superbly run company, with strength and depth in management. It fits into our high volume low-ticket strategy and allows us to move into licensed betting offices for the first time. We have a demonstrable track record of successfully integrating businesses, and there are significant revenue enhancing synergy opportunities in combining the two companies.


That would appear to mean that the company will be avoiding volatile high end London action. The combined estate of 1,267 LBO's, 167 Bingo clubs and 30 Casinos will also be used to drive custom to the online betting and casino products.

Betting Offices, Bingo and Casinos. All three are set to benefit from the deregulation measures contained within the Gambling Act 2005 and an IPO for the combined group will surely be planned for 2007. All they need to do next is decide what will be the name of the company


On a slightly different note, the Gaming Board's decision to allow 4 FOBT's in betting offices (rather than settle the legality issue in court) certainly turned out to be a dream come true for Britain's Bookmakers and both Stanley Leisure and Coral Eurobet have now hit the jackpot.

One has to wonder what these deals would have been worth if present and future FOBT profits were not included ?

The difference is certainly not small change.


Ian