Casino group Gala snaps up Coral

Coral Eurobet owns 1,260 shops

UK casino firm Gala is buying up Coral Eurobet for £2.18bn ($3.87bn), in a move which will create Europe's biggest privately-owned gaming group.

Gala's casinos and bingo halls will be merged with Coral's betting shops and dog tracks.

The enlarged empire will be worth more than £4bn, with more than 2.2 million customers visiting 1,450 outlets.

Gala chief executive Neil Goulden said betting and bingo would benefit from deregulation.

Both firms also have a strong presence on the internet, which Mr Goulden said would be the biggest advantage of merging.

"We are going to combine their Eurobet business with our fledgling interactive business - internet, TV and telephone betting," said Mr Goulden.

'Competitive threat'

Additionally, casinos will soon be allowed to advertise and stringent membership rules will be loosened.

"This is a great vehicle to take advantage of deregulation, with a full suite of assets that will benefit," said analysts Robin Chhabra at Evolution Securities.

"It is a competitive threat to other players like William Hill and Rank, but it's only mildly negative for them."

Coral is 16%-owned by management and 84%-owned by buy-out firm Charterhouse, having been previously owned by Ladbrokes and Morgan Grenfell private equity.

In August this year it announced it was considering a stock market flotation but did not rule out a sale at the time.

Since Charterhouse backed the management buy-out in 2002 Coral's annual operating profits have more than doubled to £145m on sales of £5.4bn.