Sponsors Candover, Cinven and Permira have completed an equity cure totalling £125m for gaming business
In 2005, a £2.2bn loan backing Gala’s takeover of Coral Eurobet closed hugely oversubscribed, through MLAs and bookrunners Lehman Brothers and RBS. Bank of Scotland joined that syndication as a sub-underwriting MLA ahead of launch, while ICG took some of the large mezzanine tranche on a take-and-hold basis.
At that time
Candover and Cinven had acquired Gala in 2003, when they backed a £1.24bn buyout. In 2005, Permira bought a 33% stake in the company ahead of its acquisition of Coral Eurobet, which was then merged with Gala.
Gala now operates 1,600 betting shops, 165 bingo clubs and 29 casinos. Revenues have been particularly affected by the UK smoking ban as well as by a rise in tax. Gala’s 2008 forecast Ebitda is £380m, some £20m less than last year.
• Private equity company Candover Partners sold its entire remaining stake in oil services company
Wellstream shares were down as much as 8.9% on the back of the sale, hitting an intra-day low of £12, though bankers involved were pleased with the outcome given that the deal represents around 50 days’ trading volume.
Pricing came at £12.10 a share, an 8.1% discount to Monday’s close, which compares favourably with the recent private equity sale of just under 6% in Debenhams that came at a 16% discount. Wellstream shares recouped some of their intra-day losses to close down 4.5% at £12.58. The stock has been buoyant since the company’s April 2007 IPO, when pricing was fixed at just £3.20.
• Private equity heavyweight
The sale of a minority stake precedes RAG’s planned sale of a further 50% shareholding in 2010 and 2012. Originally, RAG had suggested it might float the 25% stake on the Frankfurt Stock Exchange but deteriorating market conditions turned it against this option and it decided instead to look for a co-investor.