Candover and Cinven are in advanced talks to sell a 30% stake in Gala to rival Permira in a deal valuing the bingo and casino operator at £1.9bn.
Earlier this year, the two private equity groups, which have owned Gala since March 2003 when they backed a £1.2bn management buyout, appointed three investment banks to advise on a possible stock-market listing.
Deutsche Bank, Merrill Lynch and UBS concluded that private equity bidders are likely to value the company more highly than the public markets.
Bringing in a third investor will put Gala in a better position to lead the expected consolidation of the gaming industry, while it would mean the company will abandon plans for an autumn floatation on the London Stock Exchange.
Gala is Britain\’s leading bingo operator, with 166 bingo clubs and more than 5 million bingo members. It also runs 27 casinos across the UK, the Isle of Man and Gibraltar with more than 1.2 million members.