The UK gaming group, Rank, has launched a £250m ($392m) bid for Gala Coral’s casino division. The combination of the two estates would create the UK’s largest casino operation by number of venues, with Rank presently operating 36 casinos, while Gala has 25.
Rank aims to widen the reach of Gala’s venues to a youthful more female orientated player-base in the successful mould of its G Casino brand.
Gala Coral has net debt of £2.1bn, though its casino business generated earnings before interest, tax, depreciation and amortisation of £26.7m in the year to September 2011, on revenues of £134.4m.
In its full-year results last September Gala reported a post-tax loss of £643.4m, mostly due to exceptional costs. Rank, which has about £30m in net cash, would fund the deal with a mixture of cash and debt.
Rank’s Grosvenor casinos division, which plans to expand to 45 casinos by 2015, accounted for more than a third of group revenue in the first half of 2011 and two-thirds of the company’s £29.5m operating profit in the period. A deal would see Rank, 74 per cent owned by Malaysia-based Guoco, overtake Malaysian business rival Genting, which has 46 UK casinos.
