A LAST-MINUTE attempt by US private equity firm Apollo to muscle into the rescue of ailing bookmaker and bingo group Gala Coral is likely to be rebuffed, sources said yesterday.
Apollo has submitted a proposal to the board which would see it pump in £250m in exchange for 50 per cent of the company’s equity. The money would be used to pay off Gala’s senior lenders while junior lenders would be given the remaining 50 per cent of its share capital. Apollo would have majority voting rights, giving it control of the group.
Gala, which runs around 150 bingo clubs and 1,600 betting outlets, is laden with around £2.7bn of debt. Buyout firm Blackstone is understood to be circling. Separately, a group of Gala’s junior lenders is putting forward a restructuring plan that would see them take control of the group.
It is understood this proposal by mezzanine lenders will be the option that wins the support of Gala’s major creditors and its owners, buyout firms Candover, Cinven and Permira, as Apollo’s offer is seen as a raw deal for existing shareholders. The gaming giant’s main lenders will decide which restructuring package they prefer in the New Year, sources said.