Bingo! Gala chief to hit the jackpot in planned £2bn flotation

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The Independent Online

The casinos and bingo company Gala is lining itself up for a near-£2bn flotation following the passage of the new Gambling Bill.

The casinos and bingo company Gala is lining itself up for a near-£2bn flotation following the passage of the new Gambling Bill.

John Kelly, chief executive of Gala, could be in line for a multi-million pound windfall when the company lists, as a result of his stake in the company. Gala is expected to be worth as much as £1.8bn.

Five investment banks have been taking part in a beauty contest aimed at choosing the group's adviser for the float. The company, which is majority owned by the private equity groups Cinven and Candover, is expected to appoint an adviser within the next few weeks.

Only two years since Candover and Cinven bought Gala from CSFB, the management has accelerated its plans to float following last-minute changes to the Gambling Bill which are seen to have favoured UK operators. The reduction in the number of super casinos allowed in the market has reduced the competition that Gala would have faced from rival gambling outlets, and measures in the Bill also allow casinos to advertise for the first time. Bingo halls will also be able to roll over prize money to create bigger prize pots. After months of uncertainty and intense political negotiations, the Gambling Bill achieved Royal Assent yesterday.

Gala has also been producing bumper results over the past year. In January it said it had paid back half the investment made in the business by its private equity backers. It paid back £275m to Cinven and Candover after reporting an 18 per cent increase in sales for 2004.

Rank, which owns the Grosvenor casino chain as well as Mecca bingo halls, also said it welcomed the changes to the Gambling Bill. The UK operators have been allowed to double the number of slot machines in each venue to 20 and increase the maximum stake and prize winnings from the machines to £2 and £4,000 from 50p and £2,000.

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