Gambling group Gala Coral is understood to be considering putting its bingo clubs up for sale for more than £250million as it readies itself for a stock market flotation.
It is believed to be close to appointing an investment bank to lead a strategic review of the company, which is likely to lead to a recommendation for offloading the 140-strong Gala Bingo chain to pave the way for a market listing.
Speculation has been mounting over Gala’s plans for a flotation, which could see the group valued at more than £2billion.
A flurry of firms have listed or are planning initial public offerings (IPOs) to take advantage of buoyant conditions in financial markets, with estate agency Foxtons the most recent to float and Royal Mail set for privatisation in a £3billion listing.
But Gala is understood to have a number of headaches to resolve ahead of any IPO, with its bingo arm having struggled.
Figures for its third quarter to July 6 showed Gala Bingo’s underlying earnings dropping by 21% to £11.9million, as admissions fell 6%.
Trading is unlikely to have been helped since then due to the hot summer weather seeing many players shun bingo halls, with Mecca Bingo owner Rank Group cautioning in August over the impact of the heatwave. Despite the trading woes, Gala has reportedly already received unsolicited approaches from private equity firms for the bingo business, which in Scotland has clubs at locations including Aberdeen and in Peterhead.
It is thought the group may look to sell-off the worst-performing venues to smooth the way for a sale of the remaining chain, although it would likely retain the online bingo business and Gala name.
There is also uncertainty surrounding the management team ahead of a potential float, with pressure surrounding former Halifax Bank of Scotland (HBOS) boss Andy Hornby’s role as chief executive of its Coral bookmaking division.
He has already faced intense scrutiny since a damning report into the HBOS collapse accused him and fellow former bosses of serious management failures, which are said to rule him out of running a quoted Gala Coral.