By Aastha Agnihotri
(Reuters) - Investment trust Caledonia Investments (L:CLDN) Plc said on Monday it would buy bingo-club operator Gala Bingo Holdings Ltd from Gala Coral Group, which agreed a merger deal with bookmaker Ladbrokes (L:LAD) in July.
The deal values Gala Bingo, Britain's largest retail bingo operator, at 241 million pounds.
Gala Bingo operates 130 clubs that have more than 1.1 million active members.
The acquisition does not include Gala Coral's branded online bingo offering, galabingo.com.
"We have managed to buy the market leader in a business that we think is very defensive, with very strong cash flow but totally matches my investment criteria," Caledonia's head of unquoted investments, Duncan Johnson, told Reuters.
Johnson was on the board of Gala Bingo until 2002.
About 600 million pounds of Caledonia's net assets of 1.6 billion pounds are unquoted investments. The portfolio includes Park Holidays and asset manager Seven Investment Management.
Unquoted investments, which include both minority and majority holdings, involve securities that are not listed on an exchange. The 241 million-pound price tag "looks a good price for Caledonia given the business' strong cash flows", analyst Jane Anscombe of Edison Investment Research said in a note.
Gala Coral Group is owned by a group of private equity firms including Apollo Management and Cerberus Capital Management.
Ladbrokes and Gala Coral sealed an all-share merger deal in July to create a 2.3 billion-pound betting group that will seek to build on its dominance of Britain's high streets to expand online. [L5N1040ZM]