Caledonia sells major stake in Buzz Bingo
London-based investment trust company Caledonia Investments plc reportedly sold a majority of its stake in physical bingo operator Buzz Bingo to a popular asset management firm. Intermediate Capital Group allegedly bought the shares at a nominal price.
According to Caledonia Investments’s reports, it took the painful decision to offload its stake in Buzz Bingo after the value of its investments dropped from £22 million ($30.6 million) in September to “nil” today.
The spokesperson also explained that the depreciation was the direct result of the COVID-19 pandemic, which forced most of the brand’s 92-odd bingo estate clubs to remain shut for a major portion of last year.
Buzz Bingo, previously named Gala Bingo, was owned by the Gala Coral Group before being sold to Caledonia Investments for £241 million (335.7 million) in 2015 following Ladbrokes’ acquisition of its parent firm. The bingo operator retained its original identity for a while before going through a vigorous rebranding campaign worth £40 million (55.7 million) a couple of years ago. The move also witnessed Caledonia offloading eleven pubs in regions like Bridlington and Gateshead.
Buzz Bingo was reportedly refinanced via a voluntary agreement last year, which ended with Caledonia investing another £22 million ($30.6 million) from its own funds. However, the trust company, based in the United Kingdom, refused to funnel more cash into Buzz Bingo when the latter asked for more to counteract the losses accrued due to the pandemic.
Caledonia claims severe restrictions from the government on leisure sector businesses led to the fall of Buzz Bingo. Following the need for new funding and after carefully assessing the future, Caledonia decided not to participate in the latest round of fundraising. ICG, in association with Barclays, has agreed to take over the former owner’s shares in the operator.
ICG, a long-term investor in Buzz, agreed to invest £18 million ($25 million) into the business to help the operator meet its business objectives. ICG is betting big on Buzz Bingo to thrive beyond the lockdown. The company secured £10 million (13.8 million) from Barclays, which will further bolster the operator’s effort in the coming months. Buzz Bingo is reportedly looking to make its presence felt online.
The Road Ahead for Buzz Bingo
Chris Matthews, the Chief Executive Officer at Buzz Bingo said,
“This agreement gives us the required resources to ensure our success after the restrictions on social distancing due to COVID-19 eases. Prior to the pandemic, we were on a strong growth curve, but we’ve only been able to operate for about six weeks since March 2020 since the lockdowns”.
“The new funding ensures that we stay in business, Buzz Bingo is the UK’s largest land-based entertainment chain, and we provide affordable entertainment to over 1.1 million individuals. We’re patiently waiting for the restrictions to ease on May 31st while we prepare to serve our patrons across all 91 clubs around the country.
“We’ve prepared extensively to ensure the highest safety standards for our clients and can safely say that the clubs performed effortlessly when allowed to open for a limited run last year”.
Category: Gambling industry