Caledonia Investments
agrees to buy 130 bingo clubs for £241m leaving road clear for Gala
Coral’s planned merger with Ladbrokes
An investment trust that manages most of the wealth of one
of Britain’s richest families will become Britain’s biggest bingo
operator in a £241m deal to buy Gala Bingo.
Caledonia Investments
has agreed to buy 130 bingo clubs from Gala Coral, the bookmaker preparing to
merge with Ladbrokes.
Crucially, the Caledonia deal does not include
Gala Coral’s online bingo business, but the clubs will keep the Gala name
and the two businesses will work together. That online business has a lot of
great competition so
for bingo online choose this site.
Gala
Bingo has 38% of the UK bingo market with 1.1 million active members and it
made a pretax profit of £33m in the year to September, Caledonia said.
Gala is the UK’s biggest bingo operator with 15 million visitors a year,
employing 4,000 people.
Bingo has staged a surprise revival in recent
years, helped by the popularity of the game’s online version and a
halving of bingo duty in the 2014 budget.
In the past
month queues have formed outside clubs up and down the country as customers
were enticed to play for free in special sessions. The new owners are confident
they can build on the recent up-turn in the appeal for a form of entertainment
that until recently looked like being in terminal decline.
Caledonia,
backed by the Cayzer shipping dynasty, said it was buying Gala Bingo for its
steady cashflow and long-term popularity. The current management team, led by
the chief executive, Simon Wykes, will stay on.
Duncan Johnson,
Caledonia’s head of unquoted investments, said: “Gala Bingo is well
known to Caledonia’s unquoted investments team. Its defensive, enduring
business model, which delivers strong cash generation and dividend yield, fit
ideally with the investment criteria sought by Caledonia.”
Caledonia was bought by the Scottish Cayzer dynasty in 1951 as a
holding company for its shipping interests and is still 48.5% owned by the
family, whose wealth is estimated at £620m by the Sunday Times Rich List
(£).
The trust has increased its dividend for each of the past 48
years. It donated £75,000 to the Conservative party before the 2010
election but stopped funding the party after other shareholders protested.
Will Wyatt, Caledonia’s chief executive, is a direct descendent of
Charles Cayzer, who amassed the family’s fortune in the 19th century. The
family’s head, Tory peer Lord Rotherwick, is the brother in law of Mark
Carney, governor of the Bank of England.
Gala Coral said the deal would
pave the way for its merger with Ladbrokes to form Britain’s biggest
bookmaker. The bingo business was not part of the merger plan.
There is
still a possibility that the competition regulator might block the deal because
the combined group would have too dominant a position in the betting shop
market. It is possible that the groups might have to sell off a certain number
of shops in order to ensure clearance.
Carl Leaver, chief executive of
Gala Coral commented: “We are very pleased to have agreed the sale of Gala
Retail, following a competitive process. The sale is another transformative
step for Gala Coral Group, following the turnaround of the business over the
past few years.”
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