Close Brothers is pleased to announce that Candover and Cinven, the leading European buyout specialists, have sold a substantial equity stake in Gala Group, the bingo and casino company, to funds advised by Permira.

Close Brothers advised Gala Group on the sale of the approximately £200 million stake, valuing the group at £1.89 billion.  Under the terms of the transaction, Permira will become a joint and equal owner of Gala alongside its existing investors, Candover and Cinven. A refinancing of the company's debt has also been undertaken as part of the restructuring and has been arranged and underwritten by Royal Bank of Scotland, Lehman Brothers and ICG.

John Kelly, Chairman of Gala Group, said

"Close Brothers have been of great assistance in this deal, keeping momentum up through the long negotiations and providing sound advice on the issues we came across.  They did an excellent job of managing the many parties involved in the process and delivering this complex transaction on time.  We are really delighted with the result achieved."

Richard Grainger, CEO of Close Brothers, said

 "We enjoyed working with the Gala team for the second time, having advised on the last buyout of the group in 2003.  Once again the business has shown itself to be a highly desirable asset and now has three of the most successful private equity groups in Europe as investors.  With its additional backing from Permira, Gala stands poised to capitalise on the many new developments that will drive the gaming industry forward over the next few years."

Gala Group, one of the UK's leading leisure operators, is headquartered in Nottingham and has over 10,000 employees. The Group's principal business is the operation of bingo clubs and casinos. Gala Bingo operates 166 UK bingo clubs with over 6 million members.  Gala Casinos has 28 sites in the UK, in addition to casinos on the Isle of Man and Gibraltar.  Gala Group was formed after a management buy-in from Bass in 1997. Candover and Cinven acquired the Group in January 2003 for £1.24 billion.

For more information on this transaction or to discuss how Close Brothers can assist you, please contact Richard Grainger or Gareth Healy on +44 20 7655 3100.