The Gala Coral Group are hoping to find a buyer for its 135 bingo clubs.
Bankers at Lazard have been hired by the Gala Coral Group to find a buyer for its 135 bingo clubs in a move that is believed to then clear the way for a £2bn-plus flotation of its remaining betting and gaming business.
Gala Coral is the largest bingo operator in the UK, ahead of the Rank Group.
The firm confirmed on Friday that it has “commenced a process to explore the possibility of a disposal” of their bingo venues.
The group’s bingo offering Gala Bingo is for sale currently and is estimated to be valued at more than £250 million. Analysts believe that its sale will lead to an initial public offering of Gala Coral’s dominant bookmaking business.
The company have more than 1,800 betting shops on high streets across the UK.
The firm warned on Friday that the increasing tax burden on bookmakers would mean that the firm are forced to close its outlets this coming autumn.
Several potential buyers have been linked to the Gala Bingo business, including the former chariman of Pizza Express, Luke Johnson, as well as Henry Jackson, who is the head of the private equity investor OpCapita.
The sale of the bingo branch of the firm does not include the online bingo business.
Gala Coral’s chief executive, Carl Leaver, confirmed that the long-anticipated move alongside third quarter results on Friday. These showed an 18pc jump in total group earnings before interest, taxes, depreciation, and amortization to £67.2m – mainly helped by the World Cup and a strong online performance.
Ebitda at the bingo arm improved from £6.6m to £8.2m during the 12 weeks to July 5.
Mr Leaver said: “We remain pleased with the turnaround in the performance of Gala Retail and have recently embarked on a process to explore a potential sale of the division.”
Gala Coral is not the first bookmaker to warn that it may need to close high street betting shops in 2014. Both William Hill and Ladbrokes have already closed shops because of an increase in taxes on the gambling industry.
Bookmakers are facing a new point of consumption tax in online gambling from December and a 20pc duty on gaming machines, which was introduced in February 2013, will rise to 25pc next year.
Gala Coral said the “total number of [shop] closures will be reviewed on a rolling basis and is likely to be in line with those announced by the group’s competitors”.
Britain’s biggest bookmaker, William Hill, is closing more than 100 shops.
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