Permira Takes 30% Stake In UK Casino Operator Gala

Candover and Cinven, the buyout firms, are in talks to sell a 30% stake in Gala to rival Permira in a deal valuing the bingo and casino operator at almost £1.9 billion. The talks are at an advanced stage and, if successful, will mean Gala will cancel plans for an autumn flotation.

Since signalling the possibility of a stock-market listing after appointing three investment banks earlier this year, Gala's two main shareholders have received a number of approaches from potential buyers.

An announcement about a deal with Permira could be made within a month, although sources warned that the talks could yet break down.

The deal under discussion would put an enterprise (including debt) value on Gala of £1.9 billion.

One insider said: "By doing this deal, we have got a better price than any of us thought possible. It also gives us greater certainty."

The decision to bring a third investor on board will enable Gala to strengthen its ability to lead the expected consolidation of the gaming industry.

Candover and Cinven have owned Gala since March 2003, when they backed a £1.2 billion management buyout from CSFB Private Equity. They carried out a refinancing in January when they took out £275m.

Gala, which is led by chairman John Kelly and chief executive Neil Goulden, has 166 bingo clubs and 32 casinos. It has 1.2m casino members and more than 5m bingo members.