Coral Eurobet banks on a sale rather than a float

Coral Eurobet, Britain's third-biggest bookmakers, will today reveal that it has opted to put itself up for sale rather than seek a stockmarket listing.

The announcement by Deutsche Bank, Coral's private equity owner, will come as William Hill, its larger rival that is timing its own float for the middle of the football World Cup, announces its offer price.

City sources said Coral had decided to proceed with a sale because it had received strong expressions of interest from potential buyers including the bingo and casino groups Gala and Rank. Stanley Leisure, which already runs a string of betting shops, is also understood to be among the interested parties as are several venture capital groups.

Analysts believe Coral, which was bought by Deutsche through its Morgan Grenfell Private Equity arm for £395m in 1998, could fetch between £750m and £850m. The group, which comprises around 860 betting shops, an internet betting arm, two greyhound tracks, and a UK-based telephone betting business, is expected to report strong interim results today, buoyed by the abolition of betting taxes last year.

Coral appointed the US investment bank Lehman Brothers in March to advise it on the best way to crystallise value. While the group has insisted that the decision by William Hill's private equity owners CVC and Cinven to come to the market did not preclude its own flotation, one source said "it didn't make sense to bring two betting companies to the market at the same time".

William Hill, which had to pull a previous float attempt in 1999 after institutional investors forced down the price, is planning to raise £350m and is expected to be valued at £1.4bn to £1.6bn. David Harding, the group's chief executive, has expressed his own interest in Coral and sees scope to add around 500 shops to his 1,500-strong estate before running foul of the competition authorities.

Coral was the subject of a competition inquiry in 1998 when the Government overruled its sale from Bass to Hilton's Ladbrokes betting arm on competition grounds.

City sources have suggested that Rank, which owns the Hard Rock Café brand, would be a front runner in any bidding auction because its chief executive, Mike Smith, briefly ran Coral in his former position as head of Ladbrokes.