Troubled Gala Coral gambling on Tote
Gambling operator Gala Coral, despite facing a financial crisis of their own, have revealed they will make a bid for the state-owned bookmaker the Tote when the business is auctioned off by the government.
However, because of those financial constraints, Gala Coral will not be able to bid for the Tote on their own and will instead get a helping hand from their private equity owners. Gala Coral have long-maintained an interest in bidding for the Tote – even when the government pledged to sell the business back to racing.
If the Tote goes up for sale at the expected value of £400 million, then Candover, Cinven and Permira will all stump in £50 million – with the bid topped up with £180 million of debt plus £70 million of mezzanine (a form of finance between debt and equity) finance.
As it is already, Gala Coral’s private equity owners have agreed with the company’s creditors to inject £125 million into the business to help the flailing fortunes of the company and to pay off some £83 million worth of debt.
Neil Goulden, chief executive of Gala Coral, has said that Gala is only really interested in Tote’s high-street shops and would ideally like to keep Tote’s pool-betting operation in its current state and the emotional property of racing.
However, when the government finally do begin the auction process of the Tote, Gala Coral may encounter some stiff competition for bidders in much stronger financial positions than themselves.
Editor, Jackpot.co.uk - 2008-04-04 11:08:11