Coral Betting Chain Bought In MBO

by Jason Gorringe, Tax-News.com, London

05 August 2002

News came at the end of last week after long-running speculation that Coral, the UK's third largest betting chain, has been sold in a management buy-out for UK£860m ($1.3bn) to the private equity firm Charterhouse Development. Coral operates 870 betting shops in the UK and runs the Gibraltar-based Eurobet internet betting business.

Coral's owners, Morgan Grenfell Private Equity (MGPE), put the chain up for sale in May after deciding not to float it on the stock market. MGPE bought Coral from rival betting firm Ladbrokes for £390m in 1999 - Ladbrokes had bought Coral from Bass, but was forced to divest the chain by the UK competition authorities.

Coral said its sale would help it seek out new growth opportunities. "This deal provides an ideal platform from which we can exploit the anticipated growth in betting and gaming both in the UK and internationally," said managing director Vaughn Ashdown.

Coral bought Eurobet, at the time a small internet betting company, in November 1999. In announcing the purchase, Coral said that it planned to offer tax-free telephone betting to UK residents from Gibraltar within a month.

By November 2000 Eurobet said its weekly turnover was over £10m, with more than 120,000 bets per week. Finance director Philip Knight said: 'We have invested a lot of time and effort. Gibraltar was the ideal location to set up our infrastructure.' Eurobet said it had spent close on £2 million in office equipment and furniture alone.

Recommended