Charterhouse is reaping the benefits of its investment in Coral Eurobet following a £830m refinancing of the senior and mezzanine debt that backed the group’s £860m LBO in 2002. The refinancing will see £160m repaid to Charterhouse and early repayment of £151m of mezzanine and £98m of PIK.
Bank of Scotland and Lehman Brothers are arranging the refinancing. Lehman was sole underwriter of the £705m of senior and subordinated that backed the secondary buyout from Morgan Grenfell Private Equity (MGPE) in 2002.
In that transaction MGPE made a return of three times the money invested. MGPE acquired the betting business from Ladbrokes for £390m in a hotly contested auction after a Monopolies & Mergers Commission ruling prohibited the merger of the two betting companies.
There was a similar amount of interest in the company the second time around. Charterhouse beat potential trade buyers, Rank, Stanley Leisure and Gala, and private equity rivals including Candover and US firm Gilbert Global Equity Partners. Charterhouse’s investment in Coral Eurobet was the first from its seventh fund.