CSFB Private Equity to opt for Gala IPO?

Reports suggest the bank’s private equity unit wants to pursue a London listing for the UK-based bingo company after rejecting offers from Permira and BC Partners.

UK bingo operator Gala Group looks set to test the nervous European IPO market with a 2003 flotation after co-owner CSFB Private Equity opted against a sale to a financial buyer.


Late last year it emerged that Permira, BC Partners as well as a consortium of Cinven and Candover had tabled offers valuing the business at up to £1.2bn. However, a report in yesterday’s Observer newspaper said that CSFB was planning a UK flotation of the business that would value Gala at around £1.3bn.


CSFB Private Equity acquired Gala Group alongside PPM Ventures in early 2000, jointly paying £400m for the business. CSFB Private Equity first looked at the possibility of a flotation last summer following Cinven and CVC Partners’ successful listing of UK bookmaker William Hill in June.  In 2000, Gala also acquired Ladbrokes Casinos, one of the UK's largest casino operators, with 28 casinos in the UK, Isle of Man and Gibraltar.


The gaming and leisure sector was an active area for private equity players last year. In addition to the IPO of betting chain William Hill, one of the year’s few successful listings, Charterhouse acquired Coral Eurobet in August for £1.4bn in a secondary purchase from the former Morgan Grenfell Private Equity, beating off competition from rival private equity firms BC Partners and Candover, and in March, Legal & General Ventures and Royal Bank Private Equity acquired France’s fifth-largest casino operator in a secondary buyout worth more than E400m.


UK gambling businesses in particular have been popular since the government introduced changes to the betting laws in 2001.


Gala is one of the fastest growing retail gaming businesses in the UK, with an annual turnover of £395m, an increase of  nearly  £200m in three years. The company now employs over 10,000 employees and runs 166 bingo clubs across the UK.