US investment firm Apollo has joined the bid to take control of Gala Coral, the bingo and bookmaker giant. Apollo joins Blackstone and a group of Gala Coral’s lenders in the bidding war to gain control of the heavily-indebted gaming group.

Gala Coral are said to be in debt by a massive £2.6 billion and has been struggling for some time to refinance it. The new bid from Apollo will include a £250 million cash injection, which would be used to pay Gala’s senior lenders in return for 50% share in the company. The consortium of junior lenders would take the remaining 50% of the company in a debt for equity deal.

Gala Coral’s shareholders are likely to oppose the deal, which would see them left with nothing, and the junior lenders are also unlikely to accept the proposal as they are working on their own takeover bid.

Like many land based gaming companies Gala Coral has been struggling from a combination of the 22% bingo duty, the recession, online bingo sites and the smoking ban, which has seen players numbers dwindle over the past few years.

Dec 21 2009