Betting firm Gala Coral has announced the sale of 130 bingo clubs in a deal that values the business £241 million.
The group said the sale will help pave the way for the proposed £2.3 billion merger with Ladbrokes, which is still subject to regulatory approval.
The offloaded bingo clubs will continue to trade under the Gala brand through a licence agreement entered into by the two parties.
Gala Coral will retain both the Gala brand and the websites Galabingo.com and Galacasino.com.
The sale to Caledonia Investments is still conditional upon approval from the Gambling Commission, which is expected to take up to two months.
Gala Bingo has a 38 per cent share of the UK market and chief executive Simon Wykes said: “We believe that Caledonia’s longer-term, supportive investment model will give Gala Bingo the stable platform from which we can continue to develop our market-leading business.”
Caledonia’s head of unquoted investments, Duncan Johnson, said: “Gala Bingo is well known to Caledonia’s unquoted investments team and we are delighted to be backing Simon Wykes and his team in the next chapter of its history.
“Its defensive, enduring business model, which delivers strong cash generation and dividend yield, fit ideally with the investment criteria sought by Caledonia for its unquoted portfolio and complements our other assets in the unquoted pool.”
The planned Ladbrokes merger will create Britain’s biggest bookmaker, with almost 4,000 betting shops. The sale of some stores is seen as an attempt to ease competition regulators’ concerns over the size of the new gambling giant.
Speaking about today’s sale, Gala Coral chief executive Carl Leaver said: “We are very pleased to have agreed the sale of Gala Retail, following a competitive process. The sale is another transformative step for Gala Coral Group, following the turnaround of the business over the past few years.
“We wish the Gala Retail team all the very best for the future and believe the business will continue to thrive under its new owners. Gala Coral Group remains focused on growing and developing our retail bookmaking and online businesses, and concluding the proposed merger with Ladbrokes.”