Henry Jackson, the man behind the takeover of collapsed electricals group Comet, is eyeing bingo group Gala Bingo.
Mr Jackson, who heads investment group OpCapita, is preparing a potential bid for Gala Coral’s bingo wing, according to people familiar with the situation.
The gambling group has been seeking to sell its bingo business for about £250m since last year as it considers plans for a float.
Gala Bingo has been looked over by some of the leisure industry’s biggest investors but has inspired mixed responses as the industry struggles to recover from falling customer numbers, the smoking ban and high taxes.
“We have had a look – but I wouldn’t say that it would be top of my list,” said Hugh Osmond, the financier who launched PizzaExpress and Punch Taverns. Other potential suitors include former Channel 4 chairman Luke Johnson, via his Risk Capital Partners firm.
Even Gala Bingo’s managing director last year said potential buyers would face a tough time turning round the business. Simon Wykes said investors should steer clear of the sector “unless [they] had a huge amount of capital and didn’t mind paying over the top”.
But prospects for the bingo industry were boosted in the recent Budget, when chancellor George Osborne slashed bingo duty from 20 per cent to 10 per cent – going beyond the 15 per cent rate suggested by the industry.
OpCapita’s recent record has been mixed, with its successful turnround of video game retailer Game Retail overshadowed by the collapse of Comet, the defunct electricals group.
Comet collapsed in 2012, taking 7,000 jobs with it. It later emerged that OpCaptia pocketed about £70m in fees from the deal, while creditors – including the government, which was owed £50m – were left short.
But other OpCapita-led deals have proved more successful. Mr Jackson’s firm led the takeover of Game Retail, the video game retailer, which performed strongly over Christmas, with sales up 83 per cent year on year.
It emerged this year that Elliott, the US hedge fund, had amassed a stake of 99 per cent in the video game retailer, guaranteeing a large payday for the hedge fund if Game Retail goes ahead with its mooted £300m initial public offering.
OpCapita declined to comment, while Gala Bingo could not be reached for comment.
Gala Coral, which owns Gala Bingo as well as bookmaker Coral, appointed bankers to examine a potential float in September last year. The gambling group completed the sale of its casino division to rival Rank early last year, after a drawn out wrestling match with the Competition Commission over the sale.
Mecca Bingo owner Rank has also struggled in recent months. For the six months to December 31, visits to Mecca Bingo fell 8 per cent, which caused operating profit in the division to drop from £22.5m to £13.9m.