Coral Prepares for Growth under New Ownership

6 August 2002

Coral Eurobet Ltd. is hoping a change in ownership will open the door to expansion.

David Stevens, a spokesman for Coral, said the sale of the company last week to private equity firm Charterhouse Development Capital will provide a growth opportunity across all of the company's platforms, which include Internet gambling, WAP betting and interactive TV gambling.

"The U.K. is undergoing a period of deregulation, and we believe that the U.K. will become the international center of gaming and betting, and we certainly believe that we're going to be well placed to take advantage of that," Stevens said.

Morgan Grenfell Private Equity sold Coral to Charterhouse for £860 million. The deal puts to rest much public guessing over whether rival gambling chains Rank and Stanley Leisure would purchase Coral.

Upon completion of the sale, the CEO of Coral, Bob Scott, will resign his position. He will be replaced by Vaughn Ashdown, the company's current manager director. Ashdown said he and his management team are looking forward to working with Charterhouse.

"This is a great outcome for the company, its customers and staff," he said. "We have an excellent business, supported by powerful brands in Coral and Eurobet. This deal provides an ideal platform from which we can exploit the anticipated growth in betting and gaming both in the U.K. and internationally."

The sale is subject to approval from the European Commission. Stevens said the company believes the approval process will be smooth.

"It should be done within the next four weeks," he said. "We're not expecting any problems at all. There isn't a competition issue here, so it's more just standard European policy." (Charterhouse purchased the company from Ladbrokes after Ladbrokes was forced to sell for competitive reasons.)

Lehman Brothers facilitated the sale as financial advisor to Coral Eurobet and Morgan Grenfell. It will also be the dealer manager for the tender offers; the sale is expected to be complete in September.

The chief executive of Charterhouse, Gordon Bonnyman, said the investment is its first in a recently announced fund that will targeted EUR63 billion in new commitments.

"We have a long-standing reputation for buying industry-leading businesses in partnership with management teams that can unlock long-term growth," he said. "We look very much forward to working with Vaughn and his team."